A Bulgarian court has rejected the application for insolvency by Moststroy AD, a construction company believed to be controlled by billionaire Vassil Bozhkov, which was filed in October, a spokesperson said.

Sofia City Court has decided not to presume insolvency as the company has sufficient assets, experts commented.

Moststroy AD has already appealed the ruling.

Moststroy AD and three of its subsidiaries announced on October 6 that they have filed for bankruptcy after all their bank accounts were frozen because of unpaid debts.

A loan borrowed from the United Bulgarian Bank, a unit of the National Bank of Greece SA, was due on May 31, but the company said it has no money. Its construction machines and other equipment have been seized by Interlease, the company that leased them.

Analysts say the file for insolvency of Moststroy AD is very bad news for the Bulgarian capital market, but comes as no surprise. The precedent is feared to further dent the trust of the investors, particularly those from abroad, and make it more difficult to get credits from banks.

Under local legislation a company, which has declared insolvency, can restructure and draw up a rehabilitation plan.

Moststroy AD is one of the winning bidders to build Lot 4 of the Trakiya Highway and some have commented that the insolvency file is the result of a deliberate plot, hatched by unscrupulous businessmen.

According to the skeptics the move aims to restructure the profitable units of an enterprise and put them into companies, in which the owner is a shareholder, leaving the liabilities in the old company and to the harm of creditors.

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