One of the words most often heard by investors since the beginning of this year in Bulgaria has been ‘liquidation’. Managers of company view thistechnique as a way to escape economic hardship. The shareholders of four companies have made so fare the proposition for such afuture for their companies. Last on this list are two former privatization funds – Continental Holding JSC – Pernik, and Team -98 Holding AD – Sofia, who are heading towards liquidation. Many remember that the establishment of these companies had to create a broad shareholder class with a significance for the Bulgarian economy. A class of owners was established, but not a numerous one. According to the report in the register of the Financial Supervision Commission of the initially formed 80 holdings, into which former privatization funds were transformed, there are now only 49 it is just their presence on the stock exchange that gives some information about them. Some of this group were liquidated in the early years of transition, others have been converted into ordinary companies, and others merged with competitor companies.
Now, as some investors count money received from a dividend payment from their investment, others turn out to have not invested so successfully and happily their funds. This required their managers to take extreme measures. Three former privatization funds are already in the final phase of their existence. The General Assembly of
Continental Holding
WHICH WILL BE HELD JUNE 12 TO DISCUSS A DECISION TO TERMINATE THE COMPANY AND THE OPENING OF LIQUIDATION PROCEEDINGS. THIS BECAME NEEDED AFTER ITS SUBSIDIARIES FAILED TO WITHSTAND THE REQUIREMENTS OF THE MARKET ECONOMY AND COULD NO LONGER BE SUPPORTED BY THE FINANCES OF THE PARENT COMPANY. THE HOLDING COMPANY HAD NO INCOME IN 2013. ITS LIABILITIES AT THE END OF LAST YEAR WERE ONLY CURRENT ONES AND ONLY FOR 31,000 LEVS. IN CASH IT ONLY HAD 1,000 LEVS, AND IN THE RESERVES FUND 5,000 LEVS. AT THE SAME TIME ITS UNCOVERED LOSS AMOUNTED TO 354,000 LEVS. THESE ARE THE MOTIVES OF DIRECTORS TO REQUEST THE LIQUIDATION OF THE FORMER PRIVATIZATION FUND.
The liquidation of Continental Holding can be done within six months. The draft decision provides for the appointment of a liquidator and is likely to be Emil Ivanov, who is currently the CEO of the company. The liquidator will perform his duties for a monthly salary of 2,000 levs.
As reported last year, the annual loss amounted to 9,000 levs and will not be covered – but instead – written in the liabilities. The holding company has no own production and the companies in which it has shares are not distributing dividends this year.
The Continental Holding has no majority shareholder. Businessman Lyudmil Stoykov, who owns a holiday village in Duni and other properties in the country, controls 6.44% of the capital. Manager Emil Ivanov has 425 shares and Antoaneta Stoykov – 475 pieces. The remaining shares are owned by small shareholders. Many of them probably have long forgotten about their investment.
The shareholders of
Team -98 Holding
convened in June. The Governing Council had announced its intention to propose to the general meeting to suspend the operations of the company and to take possible further liquidation in the notes to the financial statements for 2013. The main risks and uncertainties for the company last year, and in the first quarter of this one are the lack of income from shareholdings, as it itself does not do any business.
Over the last six years, Team -98 Holding has not received dividends from companies in which it holds stakes, and his only cash receipts was from interest on deposits. Along with this, the services and wages remain constant and remain within the usual size – considering the directors report on their activities. Therefore, logically, the company announced increase in loss for 2013 to 22,000 levs (against 21,000 a year ago).
The draft decision provides for the termination of the company and within six months it should be wound up. During this time, the holding company will be managed by Dimitar Raitchev, outgoing chairman of the board of Team 98 – Holding, who is offered the position of a liquidator. His salary will be determined according to the proposals of the shareholders present at the meeting.
The main shareholder of the company is Arimpeks Ltd. with a share of 38.7% of the capital. The remaining shares are held by small investors. Some managers are holding 25 shares (0.01%), which are acquired by holders of bonds books yet from the time of mass privatization in early 1990.
Eagle Invest JSC – Sofia
is another company at the end of the liquidation process. This holding company convenes its shareholders to determine the details around the liquidation proceedings and the liquidation share to be received by all of them. However, this is still something because there are assets to distribute, while many companies over the years just sank in the archives of the Commercial Register without somehow compensating investors who trusted them.
Shareholders of the holding company will decide to extend the deadline for completion of the procedure unti 30 September. They will accept also the projected liquidation balance at the end of June. According to it, what will be allocated are funds amounting to 382,018 levs, as one share will account for a 0.18 levs in liquidation compensation.
The BANKER
