It took millennia for the real Grand Kanyon to come into existence. The megaproject of the same name in Sofia will not take that long (hopefully) but it has been already 8 years and progress is nowhere to be seen.
The huge mixed-use complex that was planned to in Sofia's Mladost residential district seems to be staying afloat, though it will be considerably reduced now that the initial investor, Turkey's Garanti Koza, has gone bankrupt. The company behind the project, GK Bulgaria, says its owner changed back in November 2018 but the links with the Turkish construction giant still stay in the company register.
3 times smaller
GK Bulgaria (called Garanti Koza Bulgaria until May 2019) is now revising the project, which was supposed to span 4.3 ha of land and include residential buildings, a hotel and a shopping and entertainment center. The revised plans are around 3 times smaller than initially planned, claims Capital Weekly.
There will be also changes in the way this project connects to the surrounding infrastructure and subway station - all those are subject to review by the municipality and are yet to be filed and approved.
So far only the excavation and consolidation works have been completed and the company has asked the local municipality for permission to reschedule the stages of the project.
Likely ownership change
Commercial register data show that the owner of the Bulgarian company is now the Netherlands-registered GK Global B.V., represented by Mehmet Ilkel. In November 2018 the company merged with the former owner, GK Holding N.V.
In October 2019, TMF Management B.V. was entered next to GK Global B.V. as a legal entity exercising direct control over the Bulgarian company, which could mean a new investor had joined in. Turkish citizens Osman Bilginer, Yavuz Selek and Mustafa Bircanoglu are named as actual physical owners in their capacity of senior managing officials but old company information about Turkey's Garanti Koza shows they have been part of its management team for many years.
In January 2018, the project lender also changed. Demir-Halk Bank (Nederland) provided a 15-million-euro loan to GK Bulgaria and a month later the mortgage and special pledge in favor of the previous lender, Unicredit Bulbank, were lifted. GK Bulgaria has also borrowed funds from Turkey's Garanti Koza Insaat, including the financing for its 20-million-leva capital (10 million euro). Its liabilities to connected companies total 34.65 million levs.
In a statement following the news of Garanti Koza's bankruptcy, GK Bulgaria said the Grand Kanyon project in Mladost and the Sofia Square project in Sofia's Krasno Selo district were owned by GK Bulgaria and another company - GK, respectively. The two companies are subsidiaries of GK Global B.V., which has not been connected with the already bankrupted Garanti Koza Insaat, since October 2018. The company also assured its customers, partners and contractors that GK Bulgaria and GK both were financially sound and fully committed to the implementation of the two projects.
The desire of GK Bulgaria to distance itself from its former parent company Garanti Koza is understandable. The Turkish company went into financial trouble after it failed to complete all the stages of a 5,000-house residential project in Istanbul and was declared bankrupt at the end of March, Turkish daily Hurriyet reported.
The company was founded in Ankara in 1948 as Garanti Construction, a subsidiary of Garanti Bankasi, and quickly turned into a large player in the Turkish construction sector. According to publications in the Turkish press, Garanti Koza has 60 or 70 shareholders, including six considered to be large. The latest report available in the international databases is for 2017 and shows revenue of 168 million euro; turnover exceeded 300 million euro in better years. Mehmet Ilkel is named as majority shareholder with a stake of 64% as of May 2020.