Court Green Lights Jaroslav Strnad’s Takeover Of Insolvent Vitkovice Heavy MachineryČTK
Ostrava, North Moravia, March 16 (CTK) – The Regional Court in Ostrava gave the green light to reorganisation of Vitkovice Heavy Machinery today, based on a decision of a single judge, appointing an insolvency administrator and a creditor committee, according to information in the insolvency register.
Konreo company has become the insolvency administrator.
Vitkovice Heavy Machinery (VHM), a part of Vitkovice Machinery Group of entrepreneur Jan Svetlik, has filed for insolvency, its debts reaching nearly Kc3bn. It has more than 300 creditors.
A strategic investor entry that had been approved by the creditors is part of the reorganisation plan. The strategic investor is SPV VTK company of Czechoslovak Group founder Jaroslav Strnad that is going to acquire a majority share.
“Creditors who have not yet registered their claims are urged to do so within two months from the resolution’s publication in the insolvency register,” judge David Stosek said in the document.
He called a review hearing for June 14, with the creditors to meet a day later.
VHM’s debts total Kc2.996bn, the company said in the insolvency petition. It lacks liquidity to repay its debts. It got into a difficult financial situation as a result of the long-lasting crisis in the engineering sector, felt by most of domestic as well as foreign companies, according to the petition.
On February 5, the company had 346 creditors, with seven secured by the debtor’s assets. The number does not include creditors with receivables from the estate.
Along with the insolvency petition, VHM applied for an approval of the so-called prepackaged reorganisation, sending the reorganisation plan to the court. The plan had been approved by a majority of both secured and unsecured creditors.
VHM’s reorganisation plan envisages the entry by an investor to finance the process and secure operating capital.
Vitkovice Heavy Machinery produces steel and steel products including products for the energy sector. It has nearly 1,000 employees. In mid-January, VHM’s management and trade unions agreed that 800 employees would stay at home, with 80 percent of their wage. The agreement will be in force until the end of March.
Trade unionists have been on strike alert since October last year, the main reason being delayed wages. The situation has changed but the strike alert has not beeb cancelled as the unions are waiting to see how the company manages to secure money for its operation.