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 programme 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, 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 a final approval of the programme 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 of 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 defence, transport, industry and energy.
Text: Hina