CMC Sisak d.o.o., the largest producer of steel and pipes in Croatia, today requested an urgent amendment and addition to the Guarantee Fund Law for economic recovery and development from the Government, in order to allow the use of this fund for companies that were in financial difficulties before July 1, 2008, such as the Pipe Mill Sisak, which was purchased by the American company CMC in September 2007 from the Croatian Privatization Fund.
CMC Sisak is seeking an urgent amendment and addition to the Guarantee Fund Law due to poorly set criteria for loan allocation, it was stated at today’s press conference of the company. According to the proposed financing models, the criteria are met by companies that were not in financial difficulties before June 2008, which is unfounded and unacceptable for CMC Sisak, said the company’s CEO Paško Vela. “By June 2008, less than a year had passed since the privatization/acquisition for CMC Sisak, and in our best plans, even under stable market conditions, it could not have been expected that we would bring the struggling company to a positive financial result,” Vela emphasized. He added that the impact of the global financial crisis only deepened the negative results. “Therefore, we are asking for the Law to be amended and supplemented, i.e., to make an exception for us and companies in a similar position regarding the entry of new capital/investment in acquired or new companies and to allow us to use the guarantee fund,” concludes Vela. He reminded that the American CMC has invested over one billion kuna in the former Pipe Mill in Sisak so far, although it was obligated by the purchase agreement to invest 516 million kuna. He highlighted that final assembly work is underway on the construction of a new and most modern steel mill, with a capacity of 450 thousand tons of steel per year, in which the American CMC will invest 65 million US dollars, and which will open in the last week of March this year. (H)
