Банкеръ Weekly



Obviously, the State has no intention to give up Balkancar Holding's subsidiaries. For several months the Ministry of Economy is fighting for their capital increase and for the acquisition of a majority stake at the expense of the holding and the small shareholders. In this way, even if Balkancar's creditors manage to get hold of the parent company, they won't have any control on its subsidiaries. The last attempt of the Ministry to impose its scheme involved Balkancar September 6 - Sofia, Balkancar Ruen - Assenovgrad, Balkancar Erma - Trun and Balkancar VFI - Breznik. In spite of the questionable success of the operation so far, the Ministry of Economy has all the reasons to be hasty.On September 23, 2002, the Sofia Civil Court announced Balkancar Holding insolvent which put an end to a six-year old legal case, initiated by First Private Bank. The holding's liabilities total BGN200MN and have not been repaid since 1997. The biggest creditor is ROSEXIMBANK which inherited BALKANBANK's receivables, amounting to BGN7.890MN and USD38.140MN. Balkancar Holding owes USD14.590MN to First Private Bank (which assets were acquired by Jorset Holdings Bulgaria), BGN1.201MN to Biochim Commercial Bank, and BGN22,002,731 and USD9,291,943 under ZUNK, as well as BGN455,405 from unpaid taxes to the State for the period 1994 - 2000.The only chance of creditors to be somehow satisfied by the parent company is to take the management of its subsidiaries companies of which the holding is the majority owner. But the Deputy Premier and Minister of Economy Nikolay Vassilev does not seem inclined to accept this option. The attack from March, 2002, was not quite successful, indeed, yet in April, despite all problems, was increased the capital of four of the holding's enterprises - the ones in Lom, Pleven, Knezha and the Sofia plant Sredetz. On September 27 the general meeting assembly of Balkancar September 6 also decided to put up its company's capital, but this time the plans of the state were disturbed by the October 4 ruling of the Sofia Civil Court which reads that the decision of the enterprise's general meeting from September 27 still doesn't mean real capital increase. On the other hand, on October 3, the court on insolvency ceased all writings in the registers of holding's subsidiaries connected with their capital increase. In this way the situation of not only Balkancar September 6, but also the one of Balkancar Ruen (which general meeting voted for capital increase on October 10) remain uncertain.The real liabilities to BALKANBANK (ROSEXIMBANK) come up to BGN3MN and the sum of BGN92MN has been amassed after a number of fabricated financial schemes like calculation of interests on interests and denomination and rearrangement of the debt. The holding's management also doubts the claims of ROSEXIMBANK and Jorset Holdings Bulgaria as successors of the affiliate companies' main creditors. Of course the creditors and the Ministry of Economy are opposed not only for basic reasons. There are 14 enterprises in Bulgaria and 9 foreign trade companies included in the holding's structure. The Balkancar brand has been evaluated to BGN8MN and is registered in the territory on 53 states. The holding's immovable property is assesed to BGN30MN and its capacity of production is 30,000 cars a year, although presently sales do not exceed 3,500. For 2000 the turnover of the companies from Balkancar's system amounts to EUR60MN and the loss exceeds EUR1MN.

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