Small Talk: Bulgarian property market in doldrums

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The Independent Online

We have written a lot about the ills of the Alternative Investment Market (Aim) in recent weeks, with many pieces detailing the lack of liquidity and the particular difficulties of some sectors in a downturn.

But if there was ever a bull market punt gone sour, it is Bulgarian Land Development (BLD), the Sofia-based property group. The company announced that it was leaving Aim (along with plenty of others) at the end of last week, after the share price fell to 26p: BLD listed in 2006 at 100p.

The company's problems are pretty obvious. Specialising in selling holiday homes around the country and flats in Sofia to Western Europeans and Russians was fine in the good times, but as investors have seen their own property investments in London implode over the last 12 months, so they were not prepared to sink any more money into a group that depended on customers taking on more expensive debt.

Chief executive Christo Iliev, who now owns 75 per cent of BLD with two other shareholders, says that sales of the group's ski resorts, which largely went to Brits and Irish people, have stalled, while the Russian clients that typically favoured the seaside reports are negotiating prices down "aggressively".

The fact is that a number of key shareholders started cutting their losses on BLD last year. With so little liquidity now in the stock, and with little prospect of the group being able to raise more money, Mr Iliev has decided that the cost of being on Aim is just not worth it.

Between 2005 and 2006, there was a glut of Bulgarian property groups to hit the Aim market. The punt on outfits like BLD, Orchid Developments, Black Sea Property and Bulgarian Property Development was clear: Bulgaria was on the cusp of joining the EU, and with debt as easy to come by as swine flu, there were plenty of buyers. How times have changed.

Volvo deal gets fuel technology firm motoring

There was some good news for Aim-listed Clean Air Power (CAP) last Friday when the group, which produces fuel technology that allows diesel and natural gas to be used together to power lorries, said it will formalise its arrangement with Volvo trucks by the autumn.

The group has been kicking around for some time, but the shares have slid over the last year or so: without a partner to test its technology – and it is a pretty tricky industry to break into – there has not been too much scope for growth.

While the deal is not actually worth a penny to the company at this stage, investors that have seen their bet falling to 25p from the listing price of more than a pound will be hoping that Volvo are suitably impressed and ask CAP to roll the idea out to all their trucks.

CAP reckons its technology can cut gas emissions and fuel costs, a point no doubt Volvo will be asking the group to prove in the coming months.

Halliwells loses three top specialists

the law firm Halliwells is losing three of its small and medium cap corporate finance specialists. Partners Clive Garston, who has been at the firm for 30 years and is chairman of Aim-listed Ultimate Finance, will leave along with Ian Brent and Steven Haize. They are all off to rival firm Davies Arnold Cooper.

While the state of the market for mergers and acquisitions, takeovers and capital raising, not to mention IPOs, is dire, Halliwells will fear that many of the trio's clients will follow them out of the door when they leave at the end of the month.

The firm, which has offices in London, Liverpool, Manchester and Sheffield, confirmed the departures on Friday, with Mark Halliwell, the firm's head of corporate, saying: "During the first half of 2009 we were ranked tenth nationally, and first in the North-west, in terms of the number of corporate transactions we advised on. In a difficult market we are maintaining and strengthening our position – and will continue to do so. We wish Clive and the two other partners well."

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