Ministry of Finance Demands Liquidation of Bruesa For Failing to Meet Covenant Conditions

12/09/2014 – Cinco Dias

The Mercantile Court Nº 1 in San Sebastian has approved the application of Spain´s Tax Administration Agency on liquidation of Bruesa Construccion, one of the leading companies operating in the Basque Country.

Bruesa entered in insolvency in 2011. In March 2013, it reached an agreement with lenders, allowing it to prolong the payment deadline and thereby quit the infamous status.

The Governmental authority claims the amount of 4.1 million euros given to the company from the Wage Guarantee Fund (Fogasa) for contract extensions of more than 300 employees. Until now, Bruesa Construccion has paid only €0.8 million of this quote.

Moreover, Fogasa pronounces inability of the builder to pay-off the debt and, according to the law in force, the loans must be satisfied before meeting the agreement with lenders which obliges Bruesa to start redeeming due payments from March 2015 onwards.

Unfortunately, the construction firm does not fare well. Its 2012 results show a €119.9 million liability owed to banks and €152 million to other lenders – providers, private and public coffers. As per the report, Bruesa reduced its revenues from €55.8 million in 2011 to €6.9 million a year later.

The company is going to oppose to the lawsuit because in opinion of its sole manager, Enrique Rico, the amount is non-payable yet. Furthermore, Fogasa has not set any deadline for the payment and now it is demanding amortization of all the lent money. We know the debt is pending, but we just do not think it is payable at this moment, defends Mr Rico. He also assured the 2013 results are much better than the 2012 figures.


Original article: Cinco Días (by Alberto Ortín Ramón)

Translation: AURA REE