Contor Group Arad on the verge of insolvency three years after floatation

Meter producer Contor Group Arad (CGC), which raised 3m euros from the Bourse through an IPO in early 2008, has filed for insolvency.

Though it got around 3m euros (11.78m lei) from investors in March 2008, the company has now come to a situation where it can no longer pay its debts and its majority shareholder, Tudor Caracioni, filed for insolvency to gain time to restructure his business.

The company accounts for its decision by the fact that its business has constantly declined, now being in a position of no longer being able to pay its debts.

"The current crunch in the civil and industrial construction industry, a field where most of the company's partners operate, led to plummeting monthly revenues. As a result of the continuously falling orders from contractual partners, the soaring commodities prices, as well as connected services, the company is coping with a severe liquidity shortage, being now in the situation of constantly registering debts, which is hindering it from tapping new markets," reads the report the company sent to the Bourse.