The two main units of construction company Balusztrád have filed for bankruptcy protection after losing a contract with Israel's Engel Group, business weekly HVG writes in its latest issue.
The units lost the contract because work fell behind schedule. They were also forced to pay a Ft 750 million penalty to Engel Group for the delay.
The units say that Engel Group failed to pay them several hundred million forints for work completed on the Sun Palace residential complex and they were thus unable to pay their subcontractors. They also argue that the delay, of a few weeks, did not affect buyers of the homes in the complex. The units said they would take Engel Group to court to claim compensation.
Balusztrád did not reveal its current debt. At the end of last year the two units have combined liabilities of Ft 6.2 billion. The Balusztrád group has an order stock of Ft 50 billion, and the two affected units are the largest within the group, owned by businessmen László Győri and Ferenc Zaborszky, HVG reported. Of the two companies, construction company Balusztrád Kivitelező Zrt had sales of Ft 10 billion and property developer Balusztrád Ingatlanfejlesztő Zrt had sales of Ft 3.5 billion last year.