Bulgarian Builders Facing Bankruptcy

SOFIA, Bulgaria -- Bankruptcies in Bulgaria's construction sector are likely to increase by about 50 percent this year, global risk management consultancy Coface said last week.

"We expect the risk in the construction sector to keep increasing, and the main reason is widespread and badly planned construction on the Black Sea coastline and in mountain resorts," Kamelia Popova, head of Coface's Bulgarian arm, told a news conference.

Official data showed 15 construction companies went bankrupt in the Balkan country last year, out of a total of 240 bankruptcies, Coface officials said.

Real estate deals and construction have boomed in the European Union newcomer in recent years, partly fueled by increased foreign demand. Property prices in Bulgaria are low compared with Western Europe.

But the rush for quick profits has affected construction quality and led to excessive supply at Black Sea and mountain resorts, analysts said.