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Bulgarian Property Developments and Fairplay Break Partnership
26.07.2010
Fairplay Commercial and Bulgarian Property Developments (BPD) have dissolved their partnership started at the end of 2006 with the purchase of a 13.2 ha site of the former Yanko Kostov factory in Varna, at a price of EUR 12 mln. Both partners planned to build a state of the art logistics park there, in addition to the existing warehouses and offices.
After the Varna venture, both funds continued developing their partnership by jointly buying land in Vidin, Plovdiv and Sandanski with the idea to build commercial complexes. In each of these projects, the two companies had equal shares in their partnership agreements.
In mid-March last year, tensions escalated when Fairplay Commercial, referring to the push-pull clause in the contract with BPD, tried to sell its stake in Varna Logistics for EUR 15 mln. A month later, BPD responded that the requested amount substantially exceeded the market value of the project and refused the offer. After applying the mechanism, Fairplay Commercial was required to buy for BPD shares at the offered price.
According to Capital Weekly, Fairplay Commercial activated the clause, because at the time it had a buyer for the logistics park. Several months later, the project partners signed a sale contract and Fairplay paid a deposit of EUR 3.9 mln. The remainder was to be paid at the beginning of last December. But as the company failed to pay the second installment, BPD retained their shares in Varna Logistics, as well as the deposit.
After a long trial, both partners managed to reach agreement outside the court. According to the agreement, Fairplay Commercial will receive the BPD share in Vidin along with the proceeds from the property sale to Billa retail chain (EUR 1.8 mln), while BPD will retain the land in Sandanski and pay for the share of the logistics park in Varna.
Both companies declined to name the exact amount paid for the 50 pct share of Varna Logistics Park. Two independent sources commented that after all redistribution, Fairplay Commercial received about EUR 5.0 mln, while BPD preserved the earlier deposit of EUR 3.9 mln.
After the Varna venture, both funds continued developing their partnership by jointly buying land in Vidin, Plovdiv and Sandanski with the idea to build commercial complexes. In each of these projects, the two companies had equal shares in their partnership agreements.
In mid-March last year, tensions escalated when Fairplay Commercial, referring to the push-pull clause in the contract with BPD, tried to sell its stake in Varna Logistics for EUR 15 mln. A month later, BPD responded that the requested amount substantially exceeded the market value of the project and refused the offer. After applying the mechanism, Fairplay Commercial was required to buy for BPD shares at the offered price.
According to Capital Weekly, Fairplay Commercial activated the clause, because at the time it had a buyer for the logistics park. Several months later, the project partners signed a sale contract and Fairplay paid a deposit of EUR 3.9 mln. The remainder was to be paid at the beginning of last December. But as the company failed to pay the second installment, BPD retained their shares in Varna Logistics, as well as the deposit.
After a long trial, both partners managed to reach agreement outside the court. According to the agreement, Fairplay Commercial will receive the BPD share in Vidin along with the proceeds from the property sale to Billa retail chain (EUR 1.8 mln), while BPD will retain the land in Sandanski and pay for the share of the logistics park in Varna.
Both companies declined to name the exact amount paid for the 50 pct share of Varna Logistics Park. Two independent sources commented that after all redistribution, Fairplay Commercial received about EUR 5.0 mln, while BPD preserved the earlier deposit of EUR 3.9 mln.
