Matt Atlas

Vítkovice Heavy Machinery Halts Production

Vítkovice Heavy Machinery (VHM) in Ostrava has halted production and sent workers home amid a cash shortage.

The company employs approximately 800 people.

Energy suppliers have cut off electricity and hot water for the company, and employees are home today with 80 percent wages.

The company does not seem to have the money to pay, and it is likely to be made redundant. Jaroslav Martínek, on behalf of VHM, confirmed that production stopped at the company.

Management is preparing to file an insolvency petition. Solanský said that in the event of a possible reorganization would be expected to reduce the number of employees. How many people would be affected by redundancy is not yet clear.

VHM produces steel and steel products. About 80 percent of the production is exported, mainly to the European Union.

VHM formerly belonged to the engineering holding of the Ostrava entrepreneur Jan Světlík. In March 2018, the company was in bankruptcy. The court approved its reorganization, and the company was gradually taken over by a strategic investor, SPV VTK, the founder of the Czechoslovak Group holding Jaroslav Strnad. By investing money in VHM and securing its financing, the company was able to resume production at that time. Now the majority owner of VHM is CE Industries.