Sadovaya in bankruptcy due to debt to auditors

Ukrainian independent coal miner Sadovaya Group (SGR PW) reported on Jan. 31 that it wasn’t able to fulfill its financial liabilities to Interaudit SARL, a Luxembourg-based auditor for the company (part of the Baker Tilly group). The firm transferred Sadovaya’s debt to NV Atradius Credit Insurance, a collections agency. The company received notification on the possibility of the transfer of the judicial proceedings to bankruptcy court, according to the report.

Alexander Paraschiy: Sadovaya is currently unable to conduct any of its three businesses, which were coal mining, coal waste processing and coal trading, as we understand. Its coal mines have not been working since October 2012, while its other businesses also do not look operational, as all Sadovaya’s business assets are located on the territory of Ukraine that is controlled by terrorists (between the occupied cities of Donetsk, Alchevsk and Krasniy Luch).

The fact that Sadovaya is not able to pay its auditors a bill that should be much less than USD 1 mln is a good indication that the company, with its total debt to banks of more than USD 41 mln (as of its latest available reporting date, Mar. 31, 2013) is de facto bankrupt.