Hungarian construction group Bayer Construct has entered bankruptcy protection as it seeks to restructure its finances and reach an agreement with creditors, while developers behind projects where the company acts as contractor are moving to reassure homebuyers that construction will continue.
Bayer Construct and subsidiary ZVK Development initiated bankruptcy proceedings in late August. The company attributed its financial difficulties to challenging market conditions, regulatory changes and the collapse of a planned state acquisition of an office complex in Budapest's Zugló district, Portfolio.hu reported. The proceedings do not cover other group companies including Bayer Property and Viastein.
The difficulties mark a dramatic turn for a company that expanded rapidly during the Orbán governments and developed close links with the state. Bayer Construct received significant state and state-backed contracts in recent years and was involved in several developments granted priority status by the previous government. Owner Attila Balázs has also had several business interests connected with the business circle of István Tiborcz, Viktor Orbán's son-in-law.
The relationship extended beyond individual projects. In 2024, the Orbán government entered into a strategic cooperation agreement with Bayer Construct, while companies belonging to the group also benefited from state support. For example, the group's Innoscitech factory in Biharkeresztes received HUF 5.5 billion in state funding towards a HUF 14 billion investment.
The company has established a reorganisation team and intends to negotiate with creditors while continuing operations. According to Portfolio.hu, the situation involves thousands of homebuyers as well as significant exposure for banks and bondholders. Bayer Construct's long-term bond liabilities stood at HUF 27.1 billion at the end of 2025, with a further HUF 3 billion reclassified as short-term debt ahead of a repayment due in 2026.
At the centre of the current difficulties is the Zugló Városközpont development. Under the previous government, the project was designated as being of strategic importance to the national economy, while the state agreed to acquire the office element for government use. According to Portfolio.hu, the final purchase price was more than HUF 254 billion plus VAT, while around HUF 315 billion had already been paid during the project. The current government subsequently withdrew from the deal, citing alleged breaches of contractual conditions. Bayer Construct disputes the legality of the withdrawal.
Bayer Construct is also involved in several large residential developments. These include the Kincsem residential project, where around 1,400 homes across the first five phases have received occupancy permits and another 740 apartments are under construction, as well as the 550-unit Epres Liget project in Debrecen.
As a general contractor, Bayer Construct is working on projects including the 270-unit Harmat Liget, the 451-unit Virágpiac residential scheme and Láng Negyed, a major brownfield redevelopment planned to deliver more than 2,600 homes in Budapest's 13th district.
Southblaze, the developer of Láng Negyed, has stressed that Bayer Construct has no ownership or decision-making role in the development and is involved solely as contractor. According to the developer, construction is progressing according to schedule and the project will be delivered regardless of the identity of the contractor.
"We are currently not looking for another contractor, as construction is progressing according to plan," Zsanett Rózsahegyi, Project Director at Southblaze, told Portfolio.hu. Deep foundation works are expected to be completed by the end of September, followed immediately by structural construction. The developer said all buildings currently under development have valid construction permits.
The coming months will largely depend on whether Bayer Construct can reach an agreement with its creditors. Portfolio.hu noted that the case brings together several thousand homebuyers, substantial banking and bondholder exposure and the fallout from the failed state property transaction. If an agreement cannot be reached, the consequences could therefore extend well beyond Bayer Construct itself.
