Brodosplit Manages to Save Diesel Engine Factory, Avoids Bankruptcy

Lauren Simmonds

The shipbuilding industry in Split has not left its company Brodosplit – Diesel Engine Factory (TDM) to go bankrupt, marking a much needed positive outcome for the otherwise enfeebled Croatian shipbuilding industry.

As Poslovni Dnevnik/Suzana Varosanec writes on the 4th of February, 2020, the decision to save Brodosplit’s diesel engine factory has been set in stone, and according to the company, they have big plans for it. The Commercial Court in Split has confirmed the large company’s status as successful.

In line with their commitment to preserving all segments of Brodosplit, the profession and the knowledge acquired in recent decades, and especially the Diesel Engine Factory, Brodosplit states that they have serious plans for the factory, and this is also evidenced by the Commercial Court’s decision rejecting the bankruptcy petition and continuing with the company.

They recall that their factory has been producing four-stroke and two-stroke engines under the license of MAN Diesel & Turbo for several decades now, producing more than 180 identical “machines”. The production of electronically controlled motors for the last decade represents the very top of technological achievements in this field and they can, in the future, be handled equally by all international marine engine manufacturers.

“However, because of unfair Far Eastern competition that can count on near-endless funding sources, its sustainability has logically been called into question. Nevertheless, our plan is to produce two-stroke LNG engines and motor fuels, the cleanest and most environmentally friendly fossil fuel, and four-stroke auxiliaries. Dual fuel engines will continue to be built in Brodosplit,” they say.

Thus, the procedure was suspended in order to determine the preconditions for opening bankruptcy proceedings against TDM, initiated upon Fina’s proposal three months ago due to a debt of 840,000 kuna, and part of the blockade was already reduced in December.

The court’s decision means that this large company is a solvent company, so its statement of access to debt – judged credible and approved by a court – provides creditors with a strong sense of security in terms of securing their claims, within short legal and court deadlines which have been set.

There are several creditors with claims, with the exception of Croatia Osiguranje (Insurance), which alone claims around 500,000 kuna. The statement of access to the debt of January the 29th, 2020, was certified by a notary public, so Brodosplit, in addition to the debtor, undertook the obligation of fulfilling all the obligations of the bankruptcy debtor within two months of the issuance of that court decision.

The Commercial Court states that Brodosplit is classified as a large company with a general liquidity ratio of 0.49 (others of the same size have an average coefficient of 0.26), a coefficient of 1.04 of the ratio of total revenue and expenses (others of the same size have an average of 0.51), and 3.88 percent of profit share in total revenue.

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