Seventeen of the 26 stores of the chain of Familia supermarkets will be run by the local Ena Markets chain after the two signed a franchise contract on May 15.

The agreement will enable Familia to operate its larger shops, which will continue operating under the brand name Familia, owned by UK investment fund Equest. It will also retain ownership of all store assets and equipment.

If the franchise contract is successful over the next six months, it could be opened to retailers, Familia said. It will also determine whether some of the Ena supermarkets would take over Familia's brand name. Ena has four stores in Sofia and two in Slunchev Bryag on the Black Sea coast.

Familia has bought several plots of land and intends to open five or six new outlets by the end of 2007, and in two to three years, to extend its network to between 50 and 100 shops countrywide.

Before Equest took over Familia, in 2006 the food chain was facing major financing problems. Prior to the acquisition, Equest owned a 30 per cent stake in Familia, Bulgarian-language Dnevnik reported.

ENA Cash and Carry is a Greek market chain with 10 supermarkets in the biggest Greek towns. Its first investment in Bulgaria began at the end of the 1990s, the first foreign investment by the company.

In 2001, Greek firm Alfa-Beta Vassilopoulos SA acquired Ena. The Greek embassy in Bulgaria announced the supermarket's activities in Bulgaria were being terminated and Ena Markets OOD was going bankrupt.

The Sofia City Court decided on June 16 2001 that the company should discontinue operations.

In fact, the bankrupt company had held no assets for a long time and its creditors could not recover their money, even though in Sofia there is not only the Ena Markets hypermarket (in Svoboda borough) but other four Ena Market stores, owned by another person and located in Sofia's Borovo, Lozenets, Ivan Vazov and Slatina neighbourhoods.

The bankruptcy case was started because of a claim by the Pain D'Or company, which manufactures long shelf life croissants, cookies and other baked products. It was calculated that Ena Markets EOOD owed Pain D'Or 7180 leva for deliveries made in 2004. At that time, Ena Markets EOOD owed clients and suppliers arrears totalling about a million leva, which by the end of 2005 decreased to 489 000 leva, Bulgarian-language Kapital reported in July 2006.

In a single decision, the court declared Ena Markets EOOD's insolvency, started a bankruptcy case, declared bankruptcy and terminated the bankruptcy case, which according to lawyers was done in hopeless cases.

Pain D'Or commercial director Hristina Draganova said that her company first requested the services of a specialised debt collection firm called Creditreform, but they also could not reach an out of court agreement with Ena Markets.

"In the beginning, Ena Markets EOOD were paying their old debts, but later on they started delaying payments and completely stopped them in the beginning of 2005. The managers were continuously changing, and at our last meeting in April 2005, they proposed a payment plan up to 2008, which was unacceptable," Creditreform manager Anani Paunov said.

He said that besides Pain DOr, another four to five suppliers requested their help because of Ena Markets EOOD debts amounting to 5000 to 10 000 leva.

"It is an attempt to escape creditors when one registers a new company, transfers ownership to it and then starts clear, " Paunov said.

The Ena market in Sofia's Svoboda borough was still working in 2006 and issuing Ena Markets receipts. Manager Georgi Kostadinov said he did not know anything about the court decision. He said that he was actually an employee of Ena Markets 2, part of a chain of 12 stores.

The owner of the other four Ena markets in Sofia, Krassimir Ivanov, refused to comment but his secretary said that they were an OOD, not EOOD, and had nothing in common with the bankrupt company.