Банкеръ Weekly



The Varna-based company Bulunion Ltd. has created a number of problems to SG Expressbank and to the bankrupt Credit Bank, almost succeeding to set the two banks at loggerheads, and as it seems will leave them without recompense. The Banker weekly learned that the Varna Regional Court slated for liquidation the company, located in Bulgaria's summer capital. Stoyan Shtarbakov, until now manager of Bulunion, has been appointed to act as the company's liquidator. He will have six months to turn in cash all Bulunion's assets, write off the company from Varna's commercial registers, and settle its liabilities to creditors, the two banks among them. The receivables of both SG Expressbank and Credit Bank are guranteed by a mortgage on the Serdika ship, which has not been sailing for a long time now.
Why did Bulunion turn out the apple of discord for SG Expressbank and Credit Bank? In October 1995 the then state-owned Expressbank extended a credit of USD2MN to the Multigroup-owned bank. Three months later, on January 2, 1996, Credit Bank released a USD2MN loan to Bulunion Ltd. In 1997 Navigation Maritime Bulgare (Navibulgar) went out of the company in which it was a partner to Trimpex Union, represented by Stoyan Shtarbakov. Besides being a shareholder in that company, Mr Shtarbakov was also the manager of Bulunion Ltd. With the loan from Credit Bank the company leased the Serdika ship. The vessel was owned by Union Marine Services, a company registered in Malta, which was also represented by Mr Shtarbakov.
The loan from Credit Bank was guaranteed by Heaven Maritime Ltd, represented by Radoslav Nenov, member of the bank's supervisory board at that time. Credit Bank, on its part, guaranteed its loan from Expressbank by a first mortgage on the same vessel. On August 6, 1996, Bulunion Ltd. became solidarily Expressbank's debtor for the loan it had extended to Credit Bank. Bulunion, however, failed to settle its liabilities in due time, while Credit Bank washed its hands by repaying USD50,000 of its debt to Expressbank, transferring the outstanding USD1,950,000 to Bulunion.
In end-November 1998 the two joint liability debtors signed an annex to the contract of August 6, 1996, by which Expressbank rescheduled their debt till September 30, 1999. Credit Bank submitted an additional guarantee to Expressbank, pledging in its favour two writs of orders for ESP 736,356,000 each (about USD1.13MN each), issued by Navibulgar.
Credit Bank also got an additional guarantee for the loan, launched to Bulunion. The Malta-registered company mortgaged for a second time the Serdika vessel. However, everything went wrong when Credit Bank was declared bankrupt on February 2, 1999, and Expressbank was in advanced privatisation procedures.
Then Bulunion Ltd. repaid part of its overdues. In fact it managed to settle only half of its liabilities. In the middle of the same year the company's debt to Credit Bank amounted to about USD1.1MN. The mortgaged Serdika ship was detained by Expressbank in dock No 2 of the Varna Shipyard. Obviously, the vessel is not in a very good shape, as instead of selling it to collect its money, Expressbank prefered to get some USD967,000 from the amount, ordered by Navibulgar in favour of Credit Bank. That lad the beginning of the conflict between the two financial institutions. The agruments regarding Bulunion's debts are still dragging on in court, while the company has already been slated for liquidation and it is hardly probable that any of the two banks gets its receivables.

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