‘Wind at Back’: Vukovar Purchased Land from Borovo for 36.3 Million Kuna

The City of Vukovar has purchased 687,057 square meters of land from Borovo for 36.3 million kuna, thereby acquiring a very attractive property, while the company has obtained exceptionally important funds for its further operations and financial restructuring, it was emphasized on Friday at a press conference in Vukovar.

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– By purchasing this land in close proximity to the Economic Zone, the City of Vukovar has acquired a very attractive, strategically important parcel that could open up new economic perspectives, stated Vukovar Mayor Ivan Penava at the press conference he held with the President of the Management Board of Borovo, Gordana Odor.

The Vukovar City Council supported the proposal for the purchase of land between the City of Vukovar and Borovo at the end of December last year, and the purchase agreement was signed at the beginning of this week. This is construction land intended for economic activity, currently home to a sports airport in the Borovo neighborhood, and its purchase will be financed by the City through the Fund for the Reconstruction and Development of the City of Vukovar.

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Fund for the Reconstruction and Development of the City of Vukovar

Mayor Penava emphasized that the purchase of the land occurred because the Government, led by Prime Minister Andrej Plenković, decided to increase the budget for the Fund for the Reconstruction and Development of the City of Vukovar by 50 percent, that is, by an additional 20 million kuna in 2018. The management board of that fund decided, at the City’s urging, to use the funds for the purchase of the parcel, explained the Vukovar mayor, reminding that this is attractive land bordered on one side by the Danube, on the other sides by a state road, and crossed by an international railway.

Penava also pointed out that the sale to Borovo has brought fresh money and that the City cannot remain on the sidelines if the company is exceptionally important for the city in trouble.

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The President of the Management Board of Borovo reminded that upon taking over the company, she found a debt of one hundred million kuna and that urgent financial restructuring had to be undertaken, which is progressing well and is in its final phase.

– This is land that was an unoperational part of the assets, which was not planned to be used operationally in the upcoming period, so its sale was a wind at the company’s back, said Odor, adding that without this, it would be difficult to carry out financial restructuring.

The purchase agreement stipulates that this year Borovo will be paid 21 million kuna, with the remainder to be paid next year.

This year’s payment will, Odor said, largely be used to cover obligations to financial institutions so that the company would not be blocked, part will go to cover due obligations to other creditors, and part will be used for regular maintenance of production and preparation of a new collection.

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The President of the Management Board of Borovo emphasized that operational restructuring of the company is also underway, including the removal of ‘bottlenecks’ at certain stages in the production process.

– The biggest ‘bottleneck’ we had was in the sewing phase, which we will overcome by hiring 30 new employees, said Odor, adding that already 20 employees from the Vukovar plant Aktiv obuće have announced their transition to Borovo.

Otherwise, two weeks ago, the mayor of Vukovar announced the possibility that the Virovitica company Aktiv obuće would cease production in Vukovar, which would leave about 50 workers without jobs.