Confort is one of the largest Romanian builders, with about EUR124 million in revenue last year. However, it filed for insolvency and the Timis Court approved it on September 20.
“We were in arrears and defaulted. We did not collect the money for our work. Confort has about EUR45 million receivables for work generally done for state-run entities, and has EUR150 million worth of ongoing contracts,” Georgica Cornu told ZF. “We also have partners and clients that went insolvent, too.”
After Confort filed for insolvency it got Expert SPRL based in Arad (western Romania) as a provisional court-appointed administrator.
The businessman did not say how high Confort’s total debt was, merely explaining that had its receivables been paid, no company in the group would have been in debt. Asked about whether more companies in his group might go the insolvency way, Cornu said, “They may, particularly since we’re talking about an integrated group here.”
A number of companies in the construction business have gone insolvent over the past year, such as Concefa Sibiu, ICIM Arad and Proges.
Georgica Cornu became a shareholder of Confort in 2000 when he bought 35% in it from the State Ownership Fund and then conducted successive capital increases, according to information available to ZF.
“Had we filed for insolvency in 2011 we would have protected the companies (in the group i.e.), but I hoped until the last minute that things would change. Now it’s not clear what will happen next, investments are uncertain. I wonder why did I get into this privatization business?” Cornu said.
The problems affecting Georgica Cornu’s companies are also showing in the number of employees, too: the entire Izometal Confort group has had to lay off about 1,000 people so far and 200 or 300 more are to follow by yearend, with only about 500 to 600 employees to be kept in the end.
The businessman added he had long-term investment loans, one of which taken to buy equipment worth about EUR40 million, EUR26 million of which have already been repaid. “We have to repay another EUR14 million by 2017-2018. We pay about EUR10 million in interests and fees and EUR10 million more on taxes and VAT a year,” Cornu said.
Confort, known especially for the contracts it is working on in the Western part of the country, ranked 6th among Romanian-held construction companies by revenue in 2011 after being 2nd in 2010.
The Izometal Group comprises 17 companies based in Timisoara, Arad and Drobeta-Turnu Severin (SW Romania), which generated about EUR300 million revenue last year, according to the group’s website.
(English version by Loredana Fratila-Cristescu)