It truly saddens a person to write about the former giant Borovo, which today is not even a shadow of its pre-war self. Admittedly, it shouldn’t be, as those were different times, but the once powerful regional giant with 22,000 employees has long been merely surviving, yet the fact that it persists, that it is still alive, awakens hope that it will one day stand on its own feet. And hope exists, especially now that an investor has shown interest in it.
This was confirmed to us by the Center for Restructuring and Sale (CERP), the owner of the company, as well as the president of the Borovo Management Board Gordana Odor, but they note that they cannot yet speak about who it is. We only know that one potential investor showed interest after a ‘public call for expressing interest from strategic partners to strengthen the market and invest in Borovo’ was sent in April, which ended on May 31. CERP refers to the confidentiality statement, as does Borovo, so they cannot disclose more information to the public.
– A confidentiality agreement has been signed, and the other party did not want to reveal their identity. Given what has been said, we must emphasize that everything will proceed transparently, but at this stage, Borovo and the potential strategic partner must determine whether their interests in the company align before initiating any procedures – Odor stated.
Maximum state assistance
Thus, we see that there is still nothing concrete, and given that the public call has just concluded, we can assume that a deep dive into the company may have just begun so that the potential investor can see whether it makes sense to invest or not. No one mentions when the interested investor might make a final decision, but hopefully, they will know where they stand by the end of the year. In the meantime, CERP is monitoring and analyzing all possible options for stabilizing operations, primarily taking care of employees, but the state has already helped significantly in recent years by postponing the repayment of a loan amounting to €6.1 million taken from Croatia Bank and HBOR.
– The fact is that Borovo persistently withstands all business challenges thanks to the assistance of the Government of the Republic of Croatia in the form of pledged shares, and in recent years, also the postponement of loan repayments, which shows the concern of the majority owner due to the importance and sensitivity of the company at the local level. More direct assistance is neither possible nor allowed given the strict rules of the European Commission regarding state aid in the role of an investor – they explain in CERP.
At least one problem eliminated
Three years ago, KPMG developed a restructuring program, but since then, only the aforementioned extension of CERP’s guarantees has been approved to postpone the repayment of loans to state banks for another year. The restructuring program proposed ways to reduce costs and the number of employees, change the production profile focusing on more profitable programs, and ultimately find a strategic partner. The failure to find a strategic partner who would guarantee the state the survival of Borovo has been the biggest criticism from state bodies so far. Finally, this process began in April, and the restructuring model should now depend on whether the secret potential investor decides to enter Borovo’s ownership.
