Primorje may be the only construction giant that is still trading but business isn't going well, despite a EUR 7.6m net profit in 2010. At the end of last year the liabilities of the Primorje Group amounted to over EUR 300m. Last month turned out to be a crucial one for the builder from the small town of Ajdovščina. To save itself the firm was forced to layoff 400 employees at the beginning of September. The bank accounts of the company were frozen soon after and on September 15 the banks NLB, Abanka, Banka Koper and NKBM decided to give Primorje an extra six months to pay off its debts.
Primorje has acquired construction projects in other countries of the former Yugoslavia and the company needs guarantees from the banks to secure the deals. It has also obtained several projects that fellow builder Slovenija Ceste Tehnike (SCT) lost because of its bad financial position. SCT went into receivership last June while, in its heyday, the Ljubljana-based construction company was one of the biggest in the region and viewed as the flagship of the Slovenian construction sector.
SCT hung on longer than fellow construction giant Vegrad which fell in October 2010, quickly followed by smaller firms Konstruktor and Gradbeno Podjetje Grosuplje (GPG). The latter left the construction of a residential complex with 400 apartments unfinished in the west of Ljubljana. The six storey high building is surrounded by scaffolding while investor Housing Fund of the Republic of Slovenia searches for a new builder. Meanwhile workers from other companies are now building the infrastructure at the site.
"Opportunities"
On the investor side there is still interest in new construction projects. The development branch KD Kvart of the KD Group is working on its Sumi project in Ljubljana which contains housing and commercial spaces, reports Staša Milušič, the public relations consultant of KD Banka.
"Despite the obvious crisis in the Slovenian construction sector and the unstable economic outlook we feel that there are opportunities for the well prepared projects," she says.
Right now the developer is completing the financial structure of the project. One of the next steps would be to find a builder for the project. But will there be a Slovenian construction company left to take on the job?
SOURCE: The Slovenia Times
