Minister says funds secured for payment of November wage to Djuro Djakovic workers

Economy Minister Darko Horvat said on Saturday that funds had been secured for the payment of November wages to workers of the ailing Djuro Djakovic mechanical engineering group and that its workers had no reason to plan a protest.

The government has been working constantly to find a solution that would help Djuro Djakovic survive, Horvat said after a meeting with representatives of the company's management.

He said the meeting was one in a series of meetings held to find both a short- and long-term solution for the survival of the Slavonski Brod-based company.

The company currently has short-term financial obligations in the amount of HRK 277 million while its long-term liabilities amount to HRK 264 million, he said, adding that on Monday the last of unpaid wages for October would be paid to the group's workers.

"Liquid funds have been secured for the payment of November wages to a large number of the workers," he said, adding that there would be some problems with the payment of wages to workers of Djuro Djakovic Industrial Solutions because the HRK 710,000 secured would not be sufficient to cover both wage payments and severance packages.

"As far as I am concerned, and I am sure people who run the company will confirm this, Djuro Djakovic workers have no reason to plan a protest," the minister said.

The company has a future and needs HRK 150 million for current liquidity and to have its account unblocked, plus, due to a deficit in the stock capital, an additional financial restructuring loan in the amount of HRK 150 million, for which the state, as well as current and potential strategic partners, will have to define the methodology of implementation in the next three months, Horvat said, noting that it would not be possible to complete the process without the EC's consent.

He said that talks were underway with banks and that he was confident the state would provide guarantees for a large amount of the required loans.

Horvat expressed confidence that liquid funds would be in the company's accounts before 17 January 2020, when bankruptcy proceedings for Djuro Djakovic Special Vehicles have to be launched.

Horvat also announced that a meeting would be held with Prime Minister Andrej Plenkovic on Monday to inform him of the specific figures.

"I want to make sure that the figures we will back and for which state guarantees will be issued secure the long-and short-term liquidity of Djuro Djakovic in meeting its current contractual obligations and signing new contracts," he said.

Djuro Djakovic Group Management Board member Slaven Posavec said that October wages had been paid to all workers and that most, if not all, workerswould receive their November wages by the end of the year.

The priority of today's meeting was the continuation of production at Djuro Djakovic and participants in the meeting worked on defining models for that, Posavec said, adding that he was an optimist but he would not speak about any specific solutions.

Ivan Baric, the shop steward and head of the striking committee at Djuro Djakovic, said earlier today for the N1 broadcaster that Djuro Djakovic workers had given up on their plan to stage a protest because they had been promised that "workers of Djuro Djakovic Industrial Solutions will start receiving their wages on Monday."

Text: Hina

News | Darko Horvat