AE&E follows A-Tec into bankruptcy

Austrian Energy & Environment (AE&E) has filed for bankruptcy just weeks after its owner A-Tec Industries AG (A-Tec) was forced to open insolvency procedures.A-Tec said it failed to find an investor for AE&E, which is its biggest subsidiary. The firm held takeover talks with Styrian company Andritz, Austrian businessman Ronald Pecik and a string of Asian industrial groups before deciding to ask the Viennese Commercial Court to start bankruptcy procedures today (Weds).A-Tec saw itself forced to file for bankruptcy only last month.The Federal Creditors’ Protection Association (KSV 1870) said creditor banks demanded four million Euros from AE&E, while business partners called for 1.2 million Euros. KSV 1870 added the industrial plant construction firm’s overall liabilities range around 558 million Euros, while its assets were just 137 million Euros.A-Tec explained a strong decline of incoming orders in the past few months and difficulties in carrying out a project in Austria put AE&E into its current situation.Around 600 employees in the Austrian cities of Vienna and Graz are affected by the bankruptcy of AE&E. The company’s works council claimed last week A-Tec’s “extreme expansion policy” was to blame for the developments.A-Tec achieved a turnover of three million Euros last year. The company has around 2,000 staff in Austria and almost 10,000 abroad. If creditors fail to agree on A-Tec’s future, its bankruptcy would be the third-biggest in Austria after the collapse of supermarket chain Konsum and the insolvency of building company Maculan.A-Tec head Mirko Kovats is confronted with increasing pressure due to the most recent developments.The businessman, who does not object being called a “turbo capitalist”, claimed in an interview earlier this year “no one” would be interested in locating an industrial facility in Austria these days because of the country’s taxation system and its bloated bureaucracy.He also said: “India wants to grow, people are working very hard there. Meanwhile, Austrian students go on strike. I won’t decide the outcome – people who buy cheap products will.”Speaking about the performance of the Austrian economy and its strong dependence on the tourism industry, he said: “We can’t live on yodelling only. (…) The tourism sector creates work – but these jobs are badly paid.”Asked by the Kurier newspaper for his opinion of Austria’s commercial policy, he simply said: “Which commercial policy?”Kovats released a book called “Die Sowjets hatten recht” (The Soviets were right), which includes several disputed business theses, earlier this year. The entrepreneur claimed in the book that the Republic of Austria “would be a case of insolvency” were it forced to compete as a company on the open market because of its high expenditure and soaring debts.Asked for his goals, he told business magazine profil three years ago: “We’ve got a lot on our list. A-Tec should become a player in the global economy. We can’t limit our activities to Europe. We are already operating in Asia, in the US, in Africa and in Latin America – and we will continue to grow.”Speaking about wealth and fortune, he told weekly magazine Format last September: “Just look at the cheap Swatch watch I’m wearing. I totally shun consumption. I’m alright with 10,000 Euros a month.”