Government to Help Find Money for Đuro Đaković Workers’ Wages

Total Croatia News

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.


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