Friday, 11 March 2022

Unionists Warn of Untenable Situation in Đuro Đaković Because of Russian Owner

ZAGREB, 11 March 2022 (2022) - The Croatian Metal Workers (SMH-IS) on Friday called on the government to urgently help the Đuro Đaković Termoenergetska Postrojenja (TEP) company so that it can operate normally, while its business is currently affected by the fact its owner is a Russian added to the sanctions list.

The president of the Independent Trade Unions Federation, Mladen Novosel underscored that the unions are aware of the situation in Croatia as a consequence of the conflicts in Ukraine.

The war has resulted in many problems for Croatian companies with the increased price of energy.

The Đuro Đaković TEP is one of those companies faced with problems, with Novosel saying the company is in an absurd situation.

"It has a market to operate on, the EU market. It has concluded contracts. We respect the sanctions against Russia but we appeal to the government to urgently intervene. We know it is aware of the problems and is trying to do something," underscored Novosel.

We appeal for this to not remain simply on goodwill but for the government to urgently decide to exclude Đuro Đaković TEP from the sanctions and to make it possible for the company to do business as usual and thus save more than 1,000 jobs in Slavonski Brod, he added.

SMH-IS union leader Siniša Kosić underscored that they are not seeking financial assistance from the government but to be allowed to work.

"The company's business operates in the EU with EU funds and resources, and the only thing is that it is owned by a Russian and cannot get to those resources without the management board. That is an absurd situation. The government is aware of this but is too slow to react. The company has money, workers and jobs but workers could easily end up on the dole," warned Kosić.

He underscored that if the company's accounts do not cease to be frozen  and the company is not taken off the sanctions list, that could be the end of it and that must not happen.

"There has to be a model. We do not operate on the Russian market. We expect the government to act faster. If it managed to resolve the issue with Sberbank in two days then it can at least resolve this problem in two weeks," added Kosić.

Deputy union leader Antun Štivić underscored that Đuro Đaković has the highest revenue in the county and employs 872 workers and additionally about 200 sub-contractors.

The company's director Ivica Marić said that he was in constant contact with the government and Ministry of Finance and that they are "actively working on trying to find a solution."

"I expect a solution sometime during the day to unfreeze our money and to unblock the company's work," said Marić.

He added that it might be possible to separate the company's operation from the owner.

"The company operates according to Croatian laws and operates exclusively in the EU and for the EU. All the suppliers are from Europe and there is not business contact or transactions with Russia, Belarus or Ukraine," underscored Marić, adding that sanctions would be strictly adhered to.

For more, check out our business section.

Monday, 3 January 2022

Gov't Says Continuing Activities for Đuro Đaković's Long-Term Sustainability

ZAGREB, 3 Jan 2022 - The Croatian government will continue doing its best to help the Đuro Đaković company survive, and conditions are being created for the company's long-term sustainability with the support of a strategic partner from the Czech Republic, the government said in a statement on Monday.

The statement was issued following a meeting between Prime Minister Andrej Plenković and the leadership of the Slavonski Brod-based mechanical engineering company.

"At the meeting, both sides welcomed the European Commission's decision of late December 2021 to approve the program for Đuro Đaković's restructuring. The government had communicated intensively with EC officials and the EC's decision is a clear signal that the plan for the Đuro Đaković Group is viable," said the statement, released after talks between PM Plenković and Đuro Đaković Group Management Board member Pavel Maroušek, Đuro Đaković Special Vehicles Management Board chairman Danijel Marić, and Đuro Đaković Special Vehicles Management Board member Goran Matanić.

The statement quoted PM Plenković as saying that the government would continue doing its best to help the company survive and support restructuring activities.

"Following the stage when, with the government's support, the continuation of production and wages for the workers were ensured, we are entering a stage when conditions are being created for the long-term sustainability of Đuro Đaković, with the support of the strategic partner from the Czech Republic," Plenković said.

The Đuro Đaković officials presented the company's plans and production activities for the coming period.

PM Plenković said that the government would very soon give final approval of the program for Đuro Đaković and adopt other accompanying documents, thus creating conditions for an efficient restructuring process.

EC approved restructuring aid for Đuro Đaković in late 2021

On 22 December, the European Commission approved Croatia's plan to grant Ðuro Ðaković a total amount of €57.4 million in restructuring aid.

The measure will enable the company to finance its restructuring plan and restore its long-term viability with the support of a private investor, the consortium of Czech companies DD Acquisition, the Commission said.

On 8 May 2020, the Commission approved rescue aid to Đuro Đaković in the form of a Croatian state guarantee on a €40.31 million loan. The guarantee allowed the company to meet urgent liquidity needs and continue its activities while limiting distortions to competition until approval of the restructuring plan. At the time, Croatia committed to submit a restructuring plan for Đuro Đaković within six months following the first disbursement of the guaranteed funds.

Croatia submitted a restructuring plan and notified the Commission of its plans to grant restructuring aid to the company. The planned restructuring aid will take the form of a debt-to-equity swap and a guarantee on potential future commercial claims for a total amount of €57.4 million. The restructuring plan provides that a private investor, i.e. the consortium of Czech companies active in the same sector, “DD Acquisition”, will participate in a share capital increase with cash and in-kind contributions of approximately €64 million.

Following the capital increase, the new investor will become the controlling shareholder of Đuro Đaković and will support various aspects of its restructuring with cash and synergies, and contribute its experience and market knowledge.

The Commission found that the aid is necessary to ensure that Đuro Đaković will be viable long-term without the need for continued public support. This will also be ensured by the acquisition of control of the company by a private investor with core activities in the same industry.

The Commission also found that the aid is appropriate, as it supports a comprehensive restructuring plan running until the end of 2023, and proportionate, with an own contribution of over 50% of the restructuring costs provided by the company and the investor at market terms.

Compensatory measures, in particular the withdrawal of the company from the project engineering market through the liquidation of the subsidiary Ðuro Ðaković Industrial Solutions and the discontinuation of the production of three types of wagons, are provided to limit potential distortions of competition on the market for freight wagons where the company operates.

Đuro Đaković employs 733 people and has a diversified industrial portfolio including defense, transport, industry, and energy.

For more, check out our politics section.

Thursday, 23 January 2020

Đuro Đaković Group Must Undergo Restructuring, Find Strategic Partner

ZAGREB, January 23, 2020 - Economy Minister Darko Horvat said on Thursday that the Đuro Đaković metal and mechanical engineering group, which is expected to receive today a loan in the amount of 150 million kuna, did have prospects but that it had to make a plan for its overhaul and find a strategic partner.

Asked about the Slavonski Brod-based company, which Prime Minister Andrej Plenković is expected to visit today, Horvat told reporters after a meeting of the inner cabinet that the company would use the 150 million kuna loan to pay a part of its financial obligations.

"... a part of the debt to suppliers will be paid, as will debts to the state, and the company will get an opportunity to buy goods and materials and carry out three existing contracts, which are expected to secure the company additional liquidity in the amount of 128 million kuna by the end of April," Horvat said, adding that the company did have prospects but that it had to make a programme for its restructuring, which would have to be approved by the European Commission.

He stressed that the company had to find a strategic partner and that the strategic partnership would have to be closely monitored.

Asked how realistic finding a strategic partner was, Horvat said that he would not discuss it in public if he did not believe that it was possible.

The government last week decided to provide a state guarantee for a 300 million kuna loan for Đuro Đaković Group, Đuro Đaković Special Vehicles and Đuro Đaković Industrial Solutions.

A total of 150 million, to be secured as a loan from the Croatian Reconstruction and Development Bank or other commercial banks in the country and/or abroad, is intended to help unblock the group's account, launch production and enable the execution of existing contracts, as well as the payment of liabilities to financial institutions and the state.

The remaining 150 million will be used as operating assets for production in Đuro Đaković Special Vehicles.

More business news can be found in the dedicated section.

Thursday, 16 January 2020

Government Provides State Guarantee for 300 Million Đuro Đaković Loan

ZAGREB, January 16, 2020 - The government decided on Thursday to provide a state guarantee for a 300 million kuna loan for the Đuro Đaković metal and mechanical engineering group Đuro Đaković Special Vehicles and Đuro Đaković Industrial Solutions.

Prime Minister Andrej Plenković said the guarantee was being provided because the company was important for Brod-Poslavina County and its "stumbling" would affect the county's economic and social situation.

Đuro Đaković has four subsidiaries and employs about 850 people, he said, adding that the European Commission had been notified.

"With this decision, we are giving Đuro Đaković a chance and will see to it that it is adequately carried out in the days and weeks ahead," Plenković said.

Economy Minister Darko Horvat said the company was unable to ensure stable financing, notably since mid-2019, when a bank which financed the production of goods wagons cancelled further cooperation. This prompted Đuro Đaković to seek a 300 million kuna bailout.

Horvat said the decision to provide the state guarantee "represents support for a bailout in line with rules on state aid and European Commission guidelines on state aid."

The loan will be used over a six-month period and not after December 31, he added.

More news about Đuro Đaković can be found in the Business section.

Thursday, 19 December 2019

Unions Demand Urgent Meeting with Plenković over Đuro Đaković

ZAGREB, December 19, 2019 - The Metal Workers' Union (SMH) and the Alliance of Autonomous Trade Unions (SSSH) warned on Thursday that the situation at the Đuro Đaković mechanical engineering group was alarming, demanding an urgent meeting with the government to set a date for the appointment of a new management board and to restart production.

"We demand that Prime Minister Andrej Plenković receive representatives of the workers of the Đuro Đaković Group and trade unions not to discuss promises but specific dates and solutions," SSSH leader Mladen Novosel told a press conference.

Novosel expressed fear that the situation in the company, based in the eastern town of Slavonski Brod, resembled that at the failed Uljanik shipyard. "An identical scenario, promises, the same characters and actors," he added.

"Is this the government plan for Slavonia? This is not an emigration, but an exodus. We are calling on the government and the prime minister to receive us as a matter of urgency to agree dates and see when we will get a new management board and investment, when we will restart production," the head of the strike committee, Ivan Barić, said.

Barić said that the situation in the company is dire, production has been suspended because of the strike, and 95 percent of their products are exported to Europe.

"Over 100 million kuna (13.5 million euro) is blocked, 96 percent of products cannot be delivered to their clients. The company's account is blocked and we cannot buy goods," Barić said.

More about Đuro Đaković can be found in the Business section.

Friday, 1 November 2019

Government to Help Find Money for Đuro Đaković Workers' Wages

ZAGREB, November 1, 2019 - Economy Minister Darko Horvat said on Friday that the necessary funding for overdue monthly wages of workers of Đuro Đaković metal and mechanical engineering group would be found and that after that, decisions should be made on the future of that Slavonski-Brod based group.

Asked by the press in Veliko Trgovišće on Friday whether it was the Croatian Postal Bank (HPB) that should provide financial means for that purpose, Horvat answered in the affirmative.

Some 70 million kuna should be used for the overhaul of the group.

"We are together with the HPB seeking a model that should help restructure Đuro Đaković. Those 70 million kuna should provide a tailwind for the company in the next six months until the completion of the restructuring and until we find a new, true and good strategic partner," Horvat said.

The accounts of the Đuro Đaković were blocked on Wednesday and the management started negotiations with creditors on the removal of the blockade. The company's workers have been on strike since 24 October because they have not received wages for September.

On Wednesday afternoon, the group said that management board chairman Marko Bogdanović tendered his resignation. Bogdanović says in an explanation of his resignation that the group is currently in an unenviable situation due to two crucial issues: inability to financially follow the production of wagons for export and inadequacy of the group's own capital.

Also on Wednesday, the group issued a financial report about its loss of 38.7 million kuna in first nine months of 2019.

Total consolidated revenue in the first nine months of 2019 was 235.5 million kuna, down 35.4% or 129 million from the first nine months of 2018, while consolidated expenditure fell by 16.9% to 116.2 million kuna.

At the end of March 2019, the Đuro Đaković Group had 544.1 million kuna in business deals signed.

On Wednesday morning Minister Horvat said that the Đuro Đaković company needed restructuring and a strategic partner.

"We realise that, as in other ailing companies, the old philosophy of doing business is simply not possible. We helped Đuro Đaković a year ago by giving a loan which is slowly coming due for repayment. We are looking for a model to pay the one late salary, but without serious restructuring and a serious strategic partner, Đuro Đaković won't be able to continue at the pace it did when it was created and when it was a recognisable brand, not just in Europe but worldwide," Horvat told reporters.

Asked about the possibility of US company BAE Systems entering the group, he said he did not have such information. Jutarnji List daily said today BAE was considering opening a maintenance centre for Bradely armoured vehicles in Slavonski Brod.

Horvat said he asked management to submit an analysis of the situation in Đuro Đaković in the next ten days, after which the company's receivables and liabilities would be known.

More economic news can be found in the Business section.

Tuesday, 13 August 2019

Đuro Đaković Special Vehicles Inks 18.5 Million Euro Deal

ZAGREB, August 13, 2019 - The Đuro Đaković Special Vehicles manufacturer concluded an 137 million kuna contract with its French client on the delivery of cargo wagons for the transport of sheet coils, the Slavonski Brod-based company stated on Monday.

The delivery of the wagons of the Shimmns type will be conducted at the end of this year and during 2020.

Wagons of this type are 4-axle closed vehicles for the transportation of sheet rolls, primarily for the automotive industry.

The Đuro Đaković Special Vehicles manufacturer "has developed, produced and delivered a greater number of different types of freight wagons for the Western European market over the last ten years, primarily focusing on configurations tailored to the specific requirements of customers and end users, while respecting the latest development trends introduced in European rail systems," the company said on its web site.

More Business news can be found in the dedicated section.

Sunday, 2 September 2018

Đuro Đaković Sells Freight Wagons to French Customer

ZAGREB, September 2, 2018 - The Đuro Đaković Special Vehicles company, which is part of the Đuro Đaković Group, has signed a 127.2 million kuna (17.18 million euro) contract with the French Ermewa company for the delivery of freight wagons for the transport of sheet metal coils, the Slavonski Brod-based company has said.

Friday, 9 February 2018

Croatian Company to Export Cargo Wagons to Germany

ZAGREB, February 9, 2018 - The Đuro Đaković Specijalna Vozila, a joint-stock company and member of the Đuro Đaković Group, has closed a deal with the German European Rail Rent (ERR) company for the delivery of cargo wagons to transport coiled sheet metal, valued at 34.5 million kuna, the Slavonski Brod-based company reported on Thursday.

Thursday, 9 February 2017

Đuro Đaković Hoping for ‘Deal of the Century’ with Kuwait

Croatian defence industry hopes that the newly-opened embassy in Kuwait will improve its chances in tenders.

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