Банкеръ Weekly



The company Novo Chimco whose rehabilitation programme was approved at the meeting of Chimco's creditors on September 30 doesn't want to waste time and intends to enter as a tenant in the Vratsa-based enterprise (until now its major shareholder Indargo Bulgaria was its tenant, but failed to start production due to various reasons). Re-employment of the workers from Indargo Bulgaria in Novo Chimco has even started and 278 people have already received their new labour contracts. On October 5 alone, 140 former employees of the chemical plant filed applications for jobs. According to Novo Chimco's plans, 650 people will be employed till the New Year. By then the chemical enterprise should be operating at 25% of capacity. Aggregate monthly production of ammonia and carbamide will reach 36,000 tons. The rehabilitation programme projects that Chimco should begin working at entire capacity in the 18th year after its commissioning. According to the Executive Director of Indargo Bulgaria, Leonid Berenbaum, however, that could become a fact as early as in the end of the third year. New installations and equipment should be purchased for the purpose and a lot of funds should be invested for satisfying ecology standards. Investments of BGN17.1MN have been projected in the rehabilitation plan for the first year. The hiking of natural gas prices is not much of a problem for the new, old tenants of Chimco's production capacities, as they have already signed a contract with Gazexport through the Swiss company Centrics, which, on its part, has acquired 50% of Novo Chimco's capital. The remaining shares are distributed among Indargo Bulgaria (30%) and the managerial team (20%). If fulfilment of the rehabilitation programme begins, Chimco's liabilities of BGN85.7MN will be paid off. Novo Chimco has proposed to pay half of its debts to its top creditors, Bulgargas and the National Electricity Company within 15 years, after a 3-year grace period. Under the proposal, the other half of the plant's liabilities are to be written off. The debts to the State will be repaid immediately after terminating the company's insolvency. The reason to ask for writing off half of Chimco's liabilities to the state-run monopolists is that very important assets, such as the thermoelectric power plant, the installation for chemical treatment of water, the railway station, the Varna terminal, etc., have been expropriated from the company. Currently, Chimco is holding negotiations in order to restore its possession on the thermal power station which is located on its territory. The transfer of the trade enterprise Chimco to Novo Chimco should be effected within a month after suspending the insolvency procedures against the fertilizer manufacturer. This has been projected in the already approved rehabilitation plan. Thus, practically, the moment when implementation of the stabilization programme begins, Chimco AD will remain in the past (the small investors, as well as the bigger shareholders like the Cypriot offshore company ABCT Trading Ltd., and Inter RAO Bulgaria will remain with stocks which will be worth a zero) and all its assets will go into Novo Chimco's hands. In fact, that scheme is well-known in Bulgaria in recent years. The green light for the rehabilitation plan, however, will be given only if the court that will extend a ruling on the plant's insolvency does not accept the arguments of Inter RAO Bulgaria, appealing against the decision of the meeting of creditors of September 30. The motive of the appeal is that at the meeting the creditors voted for accepting an evaluation of BGN140MN for Chimco's assets. According to representatives of Inter RAO Bulgaria, there was not such an item on the agenda and it should not had been discussed. The ruling of the Supreme Cassation Court on the fertilizer works' bankruptcy is expected as well by end-October. If the supreme magistrates confirm the ruling of their colleagues from the regional court (who announced insolvency procedures against Chimco) Novo Chimco will get the chance to fulfil its plans. Otherwise, the plant's management will be undertaken by Chimco's present shareholders.Meanwhile, representatives of Novo Chimco announced that the Executive Director of Inter RAO Bulgaria, Roman Miretski, was expelled from Bulgaria. The information, however, was flatly rejected by Inter RAO.

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