The CEO of Varteks, Zoran Košćec, held a media briefing today to inform about the current situation in the company, the pre-bankruptcy settlement process that has been initiated, as well as a series of proposals and measures that Varteks has initiated with the aim of restructuring the company and connecting within the Textile industry.
He also addressed certain untruths that have emerged in the media regarding the company in recent days.
– As we previously informed the public, any way of resolving the open issues is acceptable to us, and in the past few weeks, negotiations with key creditors, the State, and banks regarding the implementation of the company’s financial restructuring have been very intense. In accordance with the provisions of the Financial Operations and Pre-Bankruptcy Settlement Act, Varteks submitted a proposal for the opening of the pre-bankruptcy settlement process within the legally prescribed deadline – stated the CEO.
Varteks formally entered the pre-bankruptcy settlement process on December 14 and final agreements with key creditors, the State, and banks are underway, which is a key prerequisite for the implementation of the comprehensive restructuring plan.
– All obligations to employees are not subject to the settlement, meaning all obligations to employees are protected. Furthermore, deadlines have been defined in the pre-bankruptcy settlement process for all parties involved, which is extremely important to us. In the pre-bankruptcy settlement process, the priority is the payment of salaries to employees and financing of operations, primarily production and trade – emphasized the CEO, highlighting the importance of urgently resolving the necessary liquidity for business: - A prerequisite for the successful implementation of the company’s financial and operational restructuring, and the sustainability of further business operations is the preservation of strategically important contracts with our key business partners (Levi’s, Hugo Boss, Versace), through the execution of contracted/assumed obligations, for which we need credit funds in the amount of 25 million kuna in the next few days.
On this occasion, the CEO reminded of all the initiatives, activities, and proposals that the Management has undertaken since the outbreak of the crisis to date, with the aim of continuing the company’s operations and preserving jobs, which supports the notion that Varteks is not a ‘typical Croatian story’, but rather the opposite, Varteks is the only large textile company in the region that has managed to survive the crisis and recession: – In 2005, Varteks was a ‘company on the verge of bankruptcy’, but in less than two years, the company was restructured and achieved operational profit. Unfortunately, the company found itself in a specific situation, as at the moment when it needed to follow a more pronounced developmental phase of business with a greater emphasis on sales and revenue growth, in 2008 it entered a period of severe economic and financial crisis, which prevented the completion of the company’s restructuring through the planned phase of business revitalization. We reacted to the crisis immediately. We developed a Comprehensive Business and Financial Restructuring Plan, initiated negotiations with key creditors, and aligned all proposals with legal regulations. Unfortunately, agreements on final solutions and decisions were absent, and the company did not have reserve liquid assets to bridge or adapt to the crisis. It is precisely with this goal related to the liquidity problem that the mentioned program was developed. Despite all negative external influences, Varteks is still the largest traditional textile company in Croatia employing 2,100 people. In the last ten years, we have received incentives amounting to 20 million kuna. During the same period, we achieved exports of 2.2 billion kuna with a positive net export effect of 1.4 billion kuna, allocated 1.3 billion kuna for salaries, and 1.2 billion kuna for contributions to the State.
