Vestiges of a golden age are going under the hammer
Once mighty firms finally seeing their properties being sold off, in many cases years after suffering financial collapse
They used to be among the protagonists of Greek entrepreneurship, with a powerful presence in industry, construction and retail commerce, and a significant international presence. Yet, overborrowing, poor management and a failure to predict the deterioration of market conditions sent these firms into a tailspin that was followed by the inevitable crash.
In November 2002, George Petzetakis, a major stakeholder in the Petzetakis plastics industry, admitted in a meeting with journalists that the company’s troubles stemmed from poor decisions made by the administration; he was CEO at the time. Babis Vovos International Construction (BVIC) never recovered from the 2009 Council of State decision to suspend its construction license for a mall in the central Athens district of Votanikos.
And these are just two among dozens of companies that folded after a spectacular heyday, but which continue coming to the fore because of the delays in the process of liquidating their assets.
Babis Vovos
In late July, around two months after the death of founder Babis Vovos, the auction of yet another real estate asset of BVIC was completed. It concerned an unfinished building at 109 Kifissias Avenue in the northern Athens suburb of Maroussi, for which a subsidiary of Ten Brinke had made an offer of €4,522,858 from a starting price of €3,840,000.
For BVIC, erstwhile giant of the construction sector whose name became associated with the golden age of skyrise commercial spaces in Athens, and particularly along Kifissias Avenue, the tailspin began with the loss of the Votanikos mall project, which was part of a bigger urban renovation scheme that included the construction of a stadium for the Panathinaikos soccer club in the same area. The company, which was compelled by the court decision to abandon the mall mid-construction, had borrowed some €150 million to complete the €250 million investment. The end of what was a landmark project for the firm, in combination with the drop in real estate prices, led BVIC to file for protection from its creditors under Article 99. Having amassed debts of over €600 million, the approval of BVIC’s petition, in 2015, was one of the biggest bailouts from bankruptcy ever granted to a Greek firm. Nevertheless, the plan for restructuring the company, which had a real estate portfolio worth €1.2 billion in late 2006, was only partially implemented.
Michaniki
Michaniki SA, a construction firm founded in 1974 by Prodromos Emfietzoglou, which went on to boast a turnover of €227 million in 2007 and a backlog of around €600 million, has been in serious trouble for the past 13 years at least. The company’s assets have been going under the hammer since 2011 at least, when Emfietzoglou’s private residence and museum in the northern Athens suburb of Anavryta came under threat of repossession because of an unpaid private loan. That same property is going under the hammer in November, with an asking price of €4.8 million.
Michaniki’s troubles stem from hundreds of millions of euros in unpaid debts, which the firm’s management says are debts to the state, and the failure to secure new projects of a meaningful scale.
The company went into administration in 2015 and in 2018 partnered with the Greek branch of Italy’s GD Infrastrutture for the construction of half of the Patra-Pyrgos road in western Greece, as well as the double railway line of Psathopyrgos-Rio, where rail infrastructure company ERGOSE was the executor.
Michaniki’s troubles stem from hundreds of millions of euros in unpaid debts, which management says are debts to the state, and the failure to secure big new projects
The Italian firm has been booted off of both projects, leaving Michaniki, which does not have the qualifications to carry out the project, in the lurch.
Petzetakis
The plastics firm founded in 1960 by Aristovoulos Petzetakis filed for bankruptcy in 2015, but the liquidation of its assets is a process that is still under way. Just last April, a 600-hectare plot of land in Iraklio on Crete was sold, with the bidder putting in an offer of €391,300.
The company first got into hot water in 1973 when, following the death of its founder, the management of what was Greece’s first multinational company, with a staff of over 1,200, was assumed by members of Aristovoulos Petzetakis’ extended family, rather than going to his five children, who were too young. By the time George joined, at the age of 22, 13 years of poor and fragmented management had elapsed. In the 1990s, the group embarked on an ambitious expansion with a barrage of buyouts in Canada, South Africa and Europe until it came to boast 11 factories inside and outside Greece and a presence in 70 countries. The problems started in the late 1990s and despite George Petzetakis’ efforts at restructuring, the company’s debts – which ran to €133 million to banks alone in 2002 – just kept growing. The company filed for protection from creditors in 2011 and Petzetakis was arrested that same year for debts to the state in the area of €2 million.
Promot Lainopoulos
An auction scheduled on September 25 for the Promot Lainopoulos firm’s headquarters in Kifissia, northern Athens, for €3.9 million, is part of a recurring motif of liquidations of what was once the biggest distributor and repair service company in Greece for Mercedez-Benz Hellas.
Back in 1997, Promot Lainopoulos was regarded as the most successful firm in the country, with annual profits exceeding €1 million and sales of around €30 million. In February 2017, Mercedes-Benz Hellas severed ties with the company in the area of technical service and also with the affiliated firm Compact Lain, which sold Smart cars. It had already stopped working with Promot Lainopoulos in the sale of Mercedes-Benz vehicles since 2012.
Mounting debts and a significant drop in sales precipitated the demise of the company, which had already seen its profit margin starting to shrink in 2008. The company had been managed since 2001 by Manolis and Olga Lainopoulos following the death of their father, Ioannis, who founded the firm in 1958. Smart sales were its strong card in the 00s, but not enough to avert a collapse.
Apart from Compact Lain, the group also includes LainAir, which represented the helicopter firm Eurocopter, Eurolain (long-term leasing for Mercedes and Smart vehicles) and BIEM Austria Oil (car oil imports).
Livanis publishing
The upcoming auction, in November, of a building owned by Ilias Livanis on the corner of Dakalogianni and Paliggenesias just off Athens’ Alexandras Avenue is the latest chapter in the saga of the demise of the once-influential publishing firm, whose debts to banks alone run to €16 million.
The company also faces a barrage of lawsuits from former employees seeking unpaid wages. The legal action is targeted against two entities, Nea Synora Publications, which was founded in 1993 and appears to have offices at 98 Solonos Street in downtown Athens, and Livanis Publications, whose headquarters are at the Daskalogianni Street building. The latter was founded in 2019, is connected to Nea Synora Publications and specializes in books. Indeed, Nea Synora started getting into trouble in 2018, when it stopped payments on a bank debt of €15.8 million.
The firm’s board accepted a restructuring plan presented by its creditors in May of that same year and which was approved by the Athens Court of First Instance in January 2019. Subsequently, however, the banks terminated the deal because the company failed to meet the commitments and terms of the restructuring agreement.
