Assets of Moldova Tricotaje SA Iaşi find no buyers

The auction held for the sale of movable assets (including machinery and raw materials) with an estimated starting price of 45,000 lei, owned by the now bankrupt Moldova Tricotaje SA Iaşi, fail to attract any buyers. The company"s liquidator, Adrian Ababei, said that as a result, a new auction will be held in August. "We will put the company"s movable and immovable assets up for sale. The starting price for the movable assets, will remain 45,000 lei, and the starting price for immovable goods will remain at around 25 million lei, as set by the National Tax Administration", Ababei said.

Should the second auction fail again, the Assembly of Creditors will meet to discuss whether to lower the starting price for the auction.

SC Moldova Tricotaje SA Iaşi has almost EUR 10 million in outstanding debt, of which EUR 8 million in unpaid taxes. As proceeds from the sell-off of the company"s movable assets would be nowhere near enough to cover the company"s debts, creditors are hoping that the liquidator will be a more successful when it comes to the auction for the immovable goods, which include buildings with a total surface of 4,500 square meters and 15,000 square meters of land.

Created in 1905, Moldova Tricotaje SA was one of the major companies of the city of Iaşi, whose growth peaked during the communist period. In December 1989, the company employed 4,500 workers, and an additional 500 workers in its Hârlău division. After the revolution, the company was initially privatized in 1995, through the MEBO method. Eight years later, in 2003, the former State Property Fund (FPS), which had not received full payment of the installment set through the privatization contract, split the company, in order to avoid its liquidation as part of the huge unpaid debts it had racked up. Following the split, two new companies were created: Moldoconf SA, a company with a share capital of 1.73 million lei, burdened with over 31.2 million lei in debt, and what was left of Moldova Tricotaje was privatized and acquired by SC "Qvorum Palace" Bucureşti, owned by businessman Valentin Ionescu. According to currently available information, the amount paid under the terms of the privatization contract was EUR 501,065. Having accumulated huge debt towards the state budget and against its utility providers and suppliers, the company ceased its operations in November 2005, as its electricity supply was cut off. Only one of the company"s divisions resumed operations briefly in the beginning of 2006, just long enough to honor the order of a foreign customer. All of the company"s employees were subsequently laid off monthly in groups of 20, in order to avoid paying severance packages.

The company later became bankrupt, having incurred over 10 million Euros in debt towards almost 70 creditors. In summer 2008, the company"s liquidator sold the company"s assets, through an auction, to Moldova Universal, for the amount of 8 million lei. However in December 2008, the Ia i Court of Appeal ruled that the bankruptcy case should go to court again, which led to all the actions of the liquidator being declared null and void, including the auction won by Moldova Universal SA, which was reimbursed the 8 million lei it paid in exchange for the assets, which means the bankruptcy proceedings will begin anew.