Mivan Kier North-Irish company, which built the Liberty Centermall and New Town residential complex, both in Bucharest, is nowinsolvent as requested in its filing, according to a ruling of theBucharest Court of Law. This is the biggest insolvency case on thedomestic market this year.
A rising number of firms are choosing this path lately in a bidto protect themselves against creditors.
Mivan Kier Joint Venture Limited firm at the end of 2008 hadtotal debts standing at 20m euros and 281 employees. The company'sturnover last year reached 128m euros, while net income hit 15meuros, according to Finance Ministry data. Given that the firmgenerated profit, the decision seems surprising. The company'srepresentatives chose not to comment on the information by the timethe story was ready for print.
"Also interesting is the fact that the insolvent firm isactually a subsidiary of the Irish company and our legislation doesnot stipulate the insolvency of subsidiaries, but only of tradingcompanies, but the court appears to have approved the request,"commented a business lawyer.
According to the Bucharest Court of Law data, the administratoris BDO Conti Insolvency firm, while the deadline for theregistration of debt claim approval requests is 19th of October2009.
Mivan Kier is a joint venture of Ireland's Kier company withMivan group founded by North-Irish businessman Ivan McCabrey, 61.The group also includes Mivan Limited, co-owner of Liberty Centermall 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, whocontrols Rodipet press distribution network, a business that isalso in trouble, while for the New Town project, made up of 650apartments in Dristor area, the company's partner is Fabianinvestment fund that Dinu Patriciu businessman bought early thisyear.
Besides Liberty Center and New Town, Mivan group's developmentarm announced it would build a network of ten shopping centresunder Tiago Mall brand in various cities of the country, in thewake of investments put at 700m euros.
Construction firms, as well as real estate developers are goingthrough an extremely difficult period, with a number of projectsfrozen and payment delays both from mall tenants to owners and tobanks.
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