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Váhostav-SK creditors approve restructuring plan

CREDITORS of Váhostav-SK accepted a modified restructuring plan from the troublesome construction company April 30. To become effective, however, it still needs to be cleared by the courts.

Váhostav-SK(Source: Sme)

The judge has 15 days to do so while she wants to use them also for checking a potential property and personal interconnection between Váhostav-SK and its creditors. If such links are confirmed, the restructuring process may be complicated. 

Only one day before the meeting of creditors, Fair Play Alliance released information that Marián Moravčík, general director of Váhostav-SK, has links to shell companies, including some that are now creditors of Váhostav-SK. While Moravčík and Váhostav-SK admit Moravčík’s former involvement in companies in question, they deny any impacts on the restructuring process.

Creditors meet

The representatives of companies and banks to whom Váhostav-SK, a company with ties to oligarch Juraj Široký, an alleged sponsor of Prime Minister Robert Fico's ruling Smer party, owes money, met in Bratislava on April 30 and approved the modified restructuring plan. Banks will get back 85 percent of their claims in the next five years, while small unsecured creditors will obtain 18.75 percent. Originally banks should have gotten 100 percent and small creditors 15 percent. This means that during the restructuring process Váhostav-SK will settle 32.3 percent of recognised claims of €136 million.

According to Moravčík, the company will pay back 100 percent of outstanding money to all its creditors in total.

“It won’t be from the state budget but from money generated by the company itself,” said Moravčík, as cited by the TASR newswire.

There are 706 creditors, of whom 17 have secured their loans with collateral, and 789 unsecured creditors, of whom 559 are companies and 90 are self-employed, the SITA newswire wrote. Secured creditors hold claims of €31.3 million of which banks account for €28.3 million. Banks have given up 15 percent of their claims to benefit small unsecured creditors and thus they should get € 24.8 million in total, €3.5 million less than originally planned.

In the following years the company will settle remaining claims. Moravčík estimates that this may last next five years and that all Váhostav-SK’s debts might be settled within 10 years.

Claims of unsecured creditors will not expire even after five years during which the company should restructure. Based on fast-track adopted legislation, after the restructuring is over, they will be able to recollect another portion of their claims, up to 50 percent, €33.15 million. But since they will be entitled to settlement of these claims from future profits of the company and Váhostav-SK has been loss-making for last few years, it is questionable whether they will manage to recollect these claims.

Váhostav-SK creditors also will be offered to sell their claims for 50 percent of their nominal value the Slovak Guarantee and Development Bank (SZRB). Afterwards the state would recollect the claims purchased this way from Váhostav-SK.

The construction company also offers shares making up its 49 percent stake to be exchanged for claims. But for now the scheme of the exchange is not clear and many small creditors have already indicated that they would prefer to sell their debts to SZRB.

Links to shell companies

Shortly before Váhostav-SK creditors met at their session, Peter Kunder, lawyer of the non-profit Fair-Play Alliance, revealed an information that current general director of Váhostav-SK Moravčík is linked with some shell companies that are also creditors of Váhostav-SK. While Moravčík and Váhostav-SK admit former Moravčík’s involvement in the companies in question, they deny any impacts on the current situation.

Kunder cited a document from the end of 2010 based on which Moravčík was authorised to represent the Lomark company. Now Lomark, described by media as one of shell companies in the Váhostav-SK case, is one of creditors of the construction company. It also is one of companies on the creditors’ committee. Moravčík also represented Tortuga company, Kunder claims.   

Váhostav-SK spokesman Tomáš Halán said that in the past Moravčík, when he was self-employed, handled commercial cases also for clients of Futej & Partners law office, the SITA newswire reported, and that he returned authorisations several years ago after the cases were over.  

The questioned links feed into suspicions surrounding Váhostav-SK, and many continue to suspect that Široký himself is behind some of the shell companies that are creditors of Váhostav-SK.

To disprove these claims Moravčík has asked Široký to explain publicly the way of financing Váhostav-SK. Široký sits in supervisory board of the Finasist company which holds a 100 percent stake in Váhostav-SK. 

Judge to rule

Judge Katarína Bartalská, who will either approve or disapprove the Váhostav-SK’s restructuring plan, should receive the necessary documents May 10 at the latest. She will then have 15 days to approve the plan, according to Sme.

In the meantime Bartalská has already turned to the General Prosecution for cooperation in clarifying possible property and personal links between Váhostav-SK and its creditors.

Confirmation of such links might endanger the whole restructuring process and Váhostav-SK could yet end up bankrupt and liquidated.  

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