Банкеръ Weekly



The new owner of Vidachim did not enter the enterprise as easily as it expected to. After signing a privatisation agreement on July 17, the Rousse-based Pristisgroup-Water Constructions company acquired 70% of the capital of the chemical works at the token price of BGN1. Years ago the enterprise used to employ half of the population living in the town of Vidin. At the same time, the Rousse-based company agreed to settle Vidachim's liabilities amounting to BGN68,888,614. Just two days later, the local district court put an end to Vidachim's insolvency procedure. The two trustees in bankruptcy of the company - the lawyer Irena Alexandrova and the economist Krassimir Ivanov, were dismissed.Surprisingly, however, one of Vidachim's secured creditors - Raiffeisenbank (Bulgaria), filed a claim in the Sofia Court of Appeal against the termination of the insolvency procedure. It's worth noting that the appeal is not against the changed ownership of the shares but against the termination of the bankruptcy proceedings. However, the two things are related because if the insolvency proceedings continue, Pristisgroup-Water Constructions will not be able to run the company, even though it is the owner. New trustees in bankruptcy will have to be appointed then, too.That's how Vidachim found itself in a very awkward situation. On one hand, the rights of the former trustees in bankruptcy were suspended. On the other, the general meeting of the company's shareholders, which has to appoint a new board of directors (BoD), has been scheduled for September 12. But even after that the seven-member BoD will have no control over the company if the legal proceedings go on, lawyers point out. Considering the fact that the trustees in bankruptcy will have no power, it turns out that Vidachim will remain without management in the coming months. In my opinion, our dismissal came too hastily, because the new managers have not been chosen yet, said Irena Alexandrova to the BANKER weekly.In fact, despite the legal irregularities, Vidachim's managers already entered the administrative building of the enterprise and practically took control over it. The tall grass in front of the building is now being cleared, Ms. Alexandrova added. The local media spread an advertisement for recruiting workers for the launch of the thermoelectic power plant which is owned by the company. According to Angel Savov, lawyer of Pristisgroup, in the next three months the plant will be repaired and is expected to be recommissioned in late autumn. The Rousse-based company is not planning to unstop Vidachim's core operation - the production of tyres. However, the buyer is not allowed to sell assets of the enterprise without a permission from the Agency for Postprivatisation Control. But the new managers are not likely to wait long, considering the fact that next year Pristisgroup-Water Constructions is obliged to invest BGN3.5MN. The total amount of investments will reach BGN13.1MN by 2007. Defaults for each uninvested lev amount to 30% of its value.Within four months after the agreement is signed (on July 17), the relations with the private creditors should be settled. Vidachim has secured liabilities to Raiffeisenbank (Bulgaria), Yorset Holdings and Rosseximbank. It means that along with filing the appeal to court, the managers of Raiffeisenbank (Bulgaria) will also hold negotiations with Pristisgroup. Thus, they will hold the trumps and hope to attain better results than the ones achieved through the cashing of Vidachim's assets. We want to defend our position of a secured creditor with regards to a BGN5MN loan launched in 1996, explained Raiffeisenbank (Bulgaria) CEO, Johan Jonah. If Vidachim's property was sold in the case of insolvency, the bank could very quickly get back all of its money. That's why it will be hardly willing to make concessions in the future negotiations. Moreover, it is normal for secured creditors to get more favourable conditions than the other creditors. However, the State which is selling the shares and is currently represented by the State Receivables Agency and the State Reserve may be inclined to making concessions. The Rousse managers are asking for 70% cancellation of the liabilities as well as for rescheduled payment of the remaining 30%, pundits claim. As to the workers, they will receive their money. The rest of the 4th class creditors should be happy if they are offered even a smaller part of their receivables, because if the assets are cashed down they will receive nothing at all.

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