Hobas Tub, a foreign investment gone bankrupt

Not all the foreign investments turn out to be profitable. Some of them fail. This is the case of Hobas Tub Romania SA, a maker of fibreglass reinforced polyester resin pipes. Hobas Tub was established by an investment of an Austrian company and two investment funds.

The company went belly up this autumn, while its assets will be sold in the lump by direct negotiation over the next period. Negotiations start at $4.89 million, considering the plant required a $15.5 million investment to become operational.

Hobas Tub Romania is a joint venture wherein Hobas Management Austria controls some 41%, investment funds Romanian American Enterprise Fund (RAEF) and Romanian Investment Fund (RIF) hold 23.54% each, while the Privatisation Authority (APAPS) and Financiara SA retain over 5%, according to the latest available information.

“Banca Comerciala Romana (Romanian Commercial Bank – BCR) commenced the bankruptcy procedure for Hobas Tub Romania on September 12, 2003, when it filed with the Bucharest Court of Law in this regard. There are several things to reconstruct. The starting price for selling the assets of the plant is based on the appraisal by a British company,” Razvan Melinte, a representative of Moore Stephens RVA SA, which was appointed judicial liquidator in Hobas Tub Romania’s case, told Ziarul Financiar.

Banca Comerciala Romana has an $8 million loan to collect from the company, which had initially been taken out from Creditanstalt Austria and brokered by the late Bancorex, in view of financing 85% of the equipment and technology imports from Austria.

“The loan became part of BCR’s portfolio upon the BCR – Bancorex merger, because it did not fit in the bad credits’ category, after the reclassification. Things only got worse, afterwards, so the bank proceeded to collect the debts,” BCR spokesman Cornel Cojocaru explained.

Sources on the market say the investment funds RAEF and RIF, which hold stake in the venture, contributed $5 – $6 million together to start the investment.
adrian.mirsanu@zf.ro