Pre-bankruptcy Settlement Opened for Ingra

The Settlement Council of the Financial Agency (Fina) has today opened the pre-bankruptcy settlement procedure for the construction company Ingra and has scheduled the first pre-bankruptcy hearing for October 11, as announced today on Fina’s website.

Ingra submitted the proposal for the opening of the pre-bankruptcy settlement procedure on April 18 of this year.

As reasons for the pre-bankruptcy settlement, in the documents submitted to Fina, Ingra cites account blockage, balance sheet discrepancies (discrepancies in cash flows from the Arena Zagreb project and obligations to creditors) and the inability to secure liquidity and reach an agreement with creditors on debt restructuring.

Ingra’s account has been blocked since May 2012, and the amount of the blockage as of March 31, 2013, is 179.8 million kuna.

Total liabilities reported in the revised balance sheet as of March 31 amounted to 860.7 million kuna, while total overdue liabilities exceeding 60 days amounted to 630 million kuna.

Ingra’s obligations to creditors entering the pre-bankruptcy settlement amount to 1.28 billion kuna, consisting of 835.1 million kuna in balance sheet liabilities and 450.1 million kuna in off-balance sheet liabilities (guarantees and co-debts).

The largest portion of balance sheet liabilities relates to debt to financial institutions, amounting to 608.2 million kuna.

Total debt to public administration bodies and companies in majority state ownership is 40.2 million kuna, while debt to other creditors is 186.7 million kuna.

Among the financial restructuring measures, Ingra emphasizes refinancing and reduction of existing debt, the company’s strategic orientation towards core engineering business, focus on foreign markets, and further cost reduction.

A prerequisite for the realization of the restructuring strategy is the support of commercial banks in further operations – issuing all necessary guarantees for project realization, as well as other payment security instruments in international and domestic transactions, as stated among other things in the documents published with the pre-bankruptcy settlement of Ingra.

The financial restructuring plan proposed by Ingra is based on aligning cash flows from the lease of the Arena with the repayment of debt to creditors. Cash flows from the lease, after settling the debt to BKS Bank, according to the financial restructuring plan, would be used to settle the largest part of the debt to creditors, which would be achieved by issuing bonds of the company Lanište d.o.o.

The remaining debt would be settled by selling non-operational assets or refinancing part of the debt secured by liens on real estate until the sale of the real estate or takeover by creditors.

Operational restructuring measures include optimizing the number of employees while addressing excess staff, revising contracts with suppliers, introducing a new organizational structure, strengthening control over project implementation, and liquidating inactive related companies, etc.