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Croatia to provide guarantees on loan to Djuro Djakovic group this week - econ min

Author Iskra Pavlova
Croatia to provide guarantees on loan to Djuro Djakovic group this week - econ min Darko Horvat; Source: Croatian Economy Ministry

ZAGREB (Croatia), January 13 (SeeNews) - Croatia's government will provide diversified group Djuro Djakovic [ZSE:DDJH] this week with state guarantees on a planned loan that will help unblock the indebted group's account, economy minister Darko Horvat said on Monday.

"I am sure that the financial injection which has been prepared and is in the final stage of implementation will provide tailwinds to Djuro Djakovic. The new management is coordinating with suppliers the amount of payment, i.e. the repayment of debt, in order to unblock the account," Horvat said in a statement.

Last month, Horvat said that a short- and medium-term solution for the group is a loan of some 150 million kuna ($22 million/20 million euro), for which the government is ready to provide state guarantees.

In October, the group revealed that it has been in talks with creditors, trying to resolve a liquidity crisis which had left it short of funds to pay out wages to its employees. The group and two of its four affiliated companies were unable to pay their workers the September salaries, Djuro Djakovic has said.

In November, the group eventually managed to pay out the delayed September wages, following which they halted their strike and returned to work. However, later on the workers staged protests again, seeking the payment of the November wages, which they received at the end of the year.

In December, Djuro Djakovic Industrijska Rjesenja (DDIR) filed for pre-bankruptcy proceedings, with Djuro Djakovic saying that the remaining companies within the group do not intend to file for pre-bankruptcy proceedings.

As of January 13, the government controls a stake of some 29% in Djuro Djakovic. Outside the government and its funds, local individual Nenad Bakic controls the largest single stake of 17.71% in the group, according to Zagreb bourse data.

Djuro Djakovic's shares traded flat at 5.16 kuna by 14:30 CET on Monday.

The group's main lines of business are manufacturing of equipment for steelworks, industrial and power plants and production of rolling stock and special-purpose motor vehicles.

(1 euro = 7.44515 kuna)