Unicredit Bulbank JSC - Sofia - Short Company profile

The sharp decline in European demand for bicycles over the past 2-3 years, which followed the boom around Covid, has already claimed its first victim in Bulgaria. The shrinking market has also hit a real operating enterprise - "Leader - 96", which has been on the market for nearly 30 years. The Plovdiv company and its affiliated companies have requested the opening of bankruptcy proceedings, for which a court decision is currently awaited. The same has been done by major creditors, who have in the meantime also received security measures to guarantee their receivables for over 66 million euros. Leader-96's revenue halved in 2024, when total revenue fell below 80 million leva. For comparison, in the strong 2022, turnover hit 225 million leva. The Leader-96 company was founded in 1996 by three Bulgarians - Petar Kurshumov, Georgi Zlatanov and his son Dimitar Zlatanov. In 2016, the company attracted its first external investor - the Finnish fund KJK Capital, which bought 60% of the capital in the direct owner - Leader Group 2016, and the remaining 40% was divided equally between the creators through the company Leader Properties. Six years later, the Finns exited their investment by selling their shares to the American fund TRG, for which the local company TRG EEF Legend Bulgaria was created. The deal takes place in several stages, with the fund ultimately receiving 53% and Leader Properties - 47%. Meanwhile, the Bulgarian creators are gradually withdrawing and since the beginning of this year, Leader Properties has been transferred to an external entity - Nikolay Dechkov Stoyanov. Currently, the direct owner of Leader - 96 is Leader Group 2016, which in turn is owned by TRG EEF Legend Bulgaria. The group also has another company - E-velox, established in 2021, which is a subsidiary of Leader - 96 and owns the newly built electric bicycle production factory in Kuklen, which it leases to its owner. All four companies are effectively co-debtors under a loan agreement initially signed in 2022 between Luxembourg-registered TRG EEF Legend Two (later TRG EEF Legend Bulgaria became a co-debtor), on the one hand, and Italy's UniCredit, Bulgaria's UniCredit Bulbank and the agents GLAS Trust Corporation Limited (UK) and Global Loan Agency Services Limited (UK), on the other. Later that year, UniCredit transferred part of its commitments to United Bulgarian Bank and Allianz Bank Bulgaria, which joined as lenders. According to the agreement, TRG EEF Legend Bulgaria and related companies can receive a total of up to 87 million euros in several loans from the banks. However, already last year, the companies began to fall behind with their payments. "Leader - 96" reports a loss of 15 million leva, and current liabilities exceed assets by 2.5 million leva. For the first 7 months of this year, the loss deepens to 18 million leva. The situation is similar with "E-velox", which has a loss of 3.4 million leva, and liabilities are nearly 40 million leva above assets. The loss of "Leader Group 2016" is 1.1 million leva, and the hole in the balance sheet is 20.6 million leva. A year after payments stop - on September 18, 2025, creditors warn "TRG EEF Legend Bulgaria" that all allocated funds - over 66 million euros, including principal and interest, become due early. The company is insolvent, as it does not have the funds with which to fulfill its obligations. It is also over-indebted, as its assets cannot cover its obligations. At the same time, the other three companies filed claims with similar motives. Soon after, the creditors also asked the court to open bankruptcy proceedings, as well as to impose preliminary security measures. Lawyer Miroslava Stramska was appointed as a temporary receiver in "Leader - 96" and "Leader Group 2016", and in "E-velox" UniCredit Bulbank appointed its own manager back in July - Alexander Kostadinov. At the request of the creditors, the court imposed a general seizure and foreclosure on the assets of "Leader Group 2016" and "E-velox", including what was defined as the "only valuable long-term asset" - the real estate, representing an equipped manufacturing enterprise. In its application to the court, UniCredit Bulbank refers to a statement by its appointed manager Alexander Kostadinov, according to whom electric bicycles of "Leader-96", which is a tenant of the premises, are actively being exported from the warehouse of "E-velox". In a letter, he points out that only in the period 3-13 November, 5 trucks and 2 vans were loaded with goods for export to France and Belgium, but loading also took place in previous weeks. Earlier this year, UniCredit Bulbank froze all of "Leader-96"'s accounts in Bulgaria due to the need to complete the KYC ("Know Your Customer") process. The worst-case scenario would be for an enterprise with a 30-year history and 300 staff to stop working.