Biggest insolvency: Mivan Kier construction company, with 128m-euro turnover

Mivan Kier North-Irish company, which built the Liberty Center mall and New Town residential complex, both in Bucharest, is now insolvent as requested in its filing, according to a ruling of the Bucharest Court of Law. This is the biggest insolvency case on the domestic market this year.

A rising number of firms are choosing this path lately in a bid to protect themselves against creditors.

Mivan Kier Joint Venture Limited firm at the end of 2008 had total debts standing at 20m euros and 281 employees. The company's turnover last year reached 128m euros, while net income hit 15m euros, according to Finance Ministry data. Given that the firm generated profit, the decision seems surprising. The company's representatives chose not to comment on the information by the time the story was ready for print.

"Also interesting is the fact that the insolvent firm is actually a subsidiary of the Irish company and our legislation does not stipulate the insolvency of subsidiaries, but only of trading companies, but the court appears to have approved the request," commented a business lawyer.

According to the Bucharest Court of Law data, the administrator is BDO Conti Insolvency firm, while the deadline for the registration of debt claim approval requests is 19th of October 2009.

Mivan Kier is a joint venture of Ireland's Kier company with Mivan group founded by North-Irish businessman Ivan McCabrey, 61. The group also includes Mivan Limited, co-owner of Liberty Center mall and New Town complex, through Ropotamo firm.

In the mall located in Trafic Greu area of southern Bucharest, Mivan has as a partner the Awdi family of Lebanese businessmen, who controls Rodipet press distribution network, a business that is also in trouble, while for the New Town project, made up of 650 apartments in Dristor area, the company's partner is Fabian investment fund that Dinu Patriciu businessman bought early this year.

Besides Liberty Center and New Town, Mivan group's development arm announced it would build a network of ten shopping centres under Tiago Mall brand in various cities of the country, in the wake of investments put at 700m euros.

Construction firms, as well as real estate developers are going through an extremely difficult period, with a number of projects frozen and payment delays both from mall tenants to owners and to banks.