site.btaLoan to Roadway Construction Granted by Bulgarian Development Bank Was Unsecured

The loan to Roadway Construction AD granted by the Bulgarian Development Bank (BDB) was practically unsecured, the BDB reported on its website on Wednesday. Earlier Wednesday, the prosecution service told BTA that the Commission for Anti-Corruption and the prosecution are conducting searches in connection with an investigation into a loan granted by the BDB worth BGN 148.5 million.

BDB's report traced the stages of the lending process from the time the BDB entered into a loan agreement with Roadway Construction AD to finance the acquisition of 5,112,240 shares of PatstroyEngineering AD's capital stock from majority owner and seller Bio Mining AD on June 17, 2019.

The highest value collateral under the loan is a pledge over PatstroyEngineering's shares and the trading entity of the company.

In mid-2022, due to non-payment of loan agreement obligations, the BDB took action under the Special Pledges Act on the commercial enterprise and appointed a manager for Roadway Construction AD, as well as new management for PatstroyEngineering AD, in an effort to stabilize the company, which is the sole asset and possible source of loan repayment.

After BDB's management found that actions to collect on this exposure and protect the bank's interests were ineffective, it commissioned a detailed analysis and an action plan. As a result, the BDB found that the sale of the company's shares was the only possible means of collecting Roadway Construction debts.

In 2024, BDB's current management is taking action to sell the shares under the Commerce Act. The first four tenders were declared not to have taken place due to a lack of applications. In the last tender, held on July 30, 2024, an application was received from one bidder, Ariete Capital OOD, which was declared the buyer at a price of BGN 3,645,440.

Due to the initiated pre-trial proceedings, the bank has fulfilled its obligation and handed over the original loan documents to the authorities, which is why the tender could not be closed. The BDB has alerted the law enforcement authorities in connection with the exposure. As a result of BDB's actions, the materials from the pre-trial proceedings have been returned for further investigation.