Green Light for the Amended Restructuring Plan of Varteks

The creditors of Varteks at today’s hearing in the pre-bankruptcy settlement procedure accepted the amended financial restructuring plan of Varteks proposed by the Ministry of Finance.

The CEO of Varteks, Zoran Košćec, stated that the financial restructuring plan voted on today represents an extremely important step for the implementation of the pre-bankruptcy settlement and the restructuring of the company.

This vote adopted the method of resolving all existing claims, he said, adding that it is important for the company to resolve the agreement with secured creditors, which is currently being worked on, and he expects it to be resolved in the next few days, as it defines a new credit line that is part of the plan and is necessary for the successful implementation of the pre-bankruptcy settlement.

Košćec stated that the market conditions are complex due to the recession and crisis, but with the measures planned for implementation and everything that has been voted on, many positive changes can be expected in a relatively short time.

He mentioned that Varteks has been in a difficult situation for the past four years as they have lost adequate working capital, cash flow is negative, and it is not easy to operate under such circumstances.

However, the company is operational, the majority of strategically important contracts, especially export ones, have been preserved, but what is being done and this plan that was voted on today are prerequisites for a new beginning for the company, he said.

Regarding the 16.4 million kuna claims of employees, Košćec stated that this is an integral part of the restructuring plan and the method is defined by the plan. A new credit line is needed for this, which is being worked on through an agreement with secured creditors, and he expects that this will also be resolved soon.

The financial restructuring plan of Varteks, whose debts amount to 374.2 million kuna, among other things, anticipates that the debt to the state will be settled through recapitalization, the transfer of real estate, the write-off of part of the principal debt, and refinancing the debt over five years. The debt to financial institutions is planned to be settled through the transfer and sale of real estate, debt forgiveness, and reprogramming, and to cover negative cash flows, new borrowing of a total of 75 million kuna is planned.