Vítkovice Heavy Machinery

William Malcolm

Bankrupt Vítkovice Heavy Machinery To Sell Assets

Vítkovice Heavy Machinery (VHM) is bankrupt. The company’s assets, which have been in bankruptcy since March 19, will be sold off. The company recently withdrew a proposal for reorganization.

“The proposal for reorganization does not have the support of key creditors. As a result of the COVID-19 crisis, the state of the VHM’s economy deteriorated further,” a spokesman said. He added that in these circumstances, the management of VHM believes that bankruptcy is the only possible solution.

According to Andrej Čírtek, spokesman for the CE Power Industries Group, to which VHM is a part of, VHM employs about 300 people, and the current confirmation of bankruptcy does not affect employment in the company.

The last wave of redundancies occurred at the end of June when the steel plant was shut down, and 150 people were given two months’ notice.

Negotiations are underway with a strategic partner who would invest in the steel plant and take part in the production. The steelworks could resume in the autumn and with it 150 jobs,” he said.

VHM is a producer of steel and steel products. They ended in bankruptcy once, when the company was still part of the engineering holding of the Ostrava businessman Jan Světlík. During the reorganization, it was taken over by the company of the founder of the Czechoslovak Group holding, Jaroslav Strnad, who invested money in the company and secured its financing.

CE Industries is now the majority owner of Vítkovice Heavy Machinery. The insolvency petition was filed by the company’s management. The company was no longer able to pay its liabilities, especially for energy supplies. The problems were exacerbated by the coronavirus and measures against its spread.

According to the insolvency administrator Lukáš Zrůst, 163 creditors registered 173 claims in the insolvency proceedings. Their amount exceeds 1.7 billion.