No bids for Bjni: Auction for Sukiasyan plant put off in absence of offers

The auction for the troubled Bjni mineral water producing company this week fell through after no bidder came forward to buy it.

The bidding that was to take place on December 17 would have been the first after Bjni was recognized insolvent. The previous day was the deadline for offers, but none from the business world submitted an offer to buy the plant, leading the auction to be put off.

According to Arsen Chitchyan, a court-appointed manager of the Bjni bankruptcy process, the minimum asking price for the company was set at 5 billion, 184 million drams (about $13.6 million).

Bjni belonged to the extended family of wealthy businessman and former pro-opposition MP Khachatur Sukiasyan, who openly supported the bid of ex-president Levon Ter-Petrosyan in the 2008 presidential election. Bjni declared bankruptcy after what company leadership said was harassment against the plant brought on by Sukiasyan’s support of Ter-Petrosyan, the main rival of President Serzh Sargsyan.

Sukiasyan went into hiding after the March 1-2, 2008 post-election clashes to avoid arrest on charges of organizing the unrest and emerged only on September 2 when he turned himself in to the authorities and was taken into custody.

Sukiasyan was released a few days later on a written pledge not to leave the country while investigation into his case was in progress.

Authorities accused Sukiasyan’s SIL Concern group of tax fraud and effectively confiscated Bjni after the latter refused to pay, rejecting the charges.

A fine of about $11 million was placed on the plant in Cherentsavan, some 40 kilometers north of capital Yerevan, leading to its closure in October 2008 that left hundreds jobless in the economically depressed area.

(A total of 483 people worked at Bjni at the moment of its closure; in the course of 2008 the company would pay 60-70 million drams, about $157,000-180,000, in taxes every month.)

Bjni was for the first time put up for auction in February this year and was sold for 4 billion drams ($10.3 million) to government-linked businessman, MP and President of the Football Federation of Armenia Ruben Hayrapetyan.

“I will invite all of you to Bjni in a year and we will see the opportunities of the plant and how obligations to the state are fulfilled,” said Hayrapetyan then.

However, 40 days after the auction, on April 2, 2009, Hayrapetyan annulled his bid.

On July 24, the “Bjni Mineral Water Plant” CJSC turned to the European Court of Human Rights against the Republic of Armenia. As a fair settlement they asked the Court to oblige the Armenian government to pay about 220 million euros.

The date of the plant’s next auction was to be announced in the press.

Court-appointed Bjni bankruptcy procedure manager Chitchian says the purpose of putting the company to an auction with one lot, was to spare it from being broken up in the future.

Under Armenian law, the authorities must lower the minimal asking price by 20 percent after each failed auction.

“The law has no restriction, however if there is no big change in the market price, the manager must stop the auctions,” said Chitchyan.

Last week, SIL Concern issued a statement regarding the illegal use of the brand name belonging to SIL Group.

“The company does not bear responsibility for the quality of Bjni mineral water produced by the bankruptcy procedure manager, as it is outside our organizational and quality (including) laboratory control,” said the company.

“Filters at the plant were replaced only recently, and there is no problem in connection with quality, they even ensure a better quality,” said Chitchyan.