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Croatia's Djuro Djakovic pays out Sept wages, workers halt strike

Author Iskra Pavlova
Croatia's Djuro Djakovic pays out Sept wages, workers halt strike Photo: Djuro Djakovic

ZAGREB (Croatia), November 12 (SeeNews) - Croatia's diversified group Djuro Djakovic [ZSE:DDJH] said on Tuesday it has paid out the delayed September wages to its workers, following which they halted their strike and returned to work.

The company gave no further details in a statement filed with the Zagreb Stock Exchange (ZSE).

Last month, blue-chip Djuro Djakovic said it was in talks with creditors, trying to resolve a liquidity crisis which has left it and two of its four affiliated companies short of funds to pay out the September wages. After the announcement, some 600 employees went on strike, demanding the payment of their salaries and the resignation of the director of the management board. Subsequently, the group's board chairman Marko Bogdanovic submitted his resignation at the end of October.

News wire SeeBiz quoted the head of the workers' strike council, Ivan Baric, as saying on Monday that the payment of the September wages has been settled now but it is unclear what will happen with the October salaries, which must be paid out by 1400 CET on Friday.

If the company fails to meet the Friday deadline, the workers will convene next Monday to decide whether to resume the strike action, Baric said.

"We hope the government will do this part of the job and secure financing to continue production. The management could not tell us anything about this today. Without secured financing for production, this crisis will deepen," Baric said.

According to Baric, only 5% of the work on contracts for Germany and France still needs to be done in order to complete the deals.

In August, Djuro Djakovic said it signed a 137 million kuna ($20 million/18 million euro) contract to deliver wagons for cold rolled sheet steel coils to an unnamed French client, with the delivery expected to begin at the end of 2019 and continue throughout 2020.

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

Earlier this month, economy minister Darko Horvat said that the defence ministries of Croatia and the US were in talks on a joint project on the future of Djuro Djakovic, in which the US government could participate financially, logistically, as well as via transfer of knowledge and technology.

Horvat also said that the Croatian government was in talks with two European companies interested in entering into a strategic partnership with Djuro Djakovic, but did not reveal their names.

According to earlier media reports, UK-headquartered BAE Systems is interested in entering Djuro Djakovic's ownership structure, planning to produce the Bradley combat vehicles in Croatia's Slavonski Brod where the group is based.  

The government controls a combined stake of 22.45% in Djuro Djakovic, while outside the government and its funds, local individual Nenad Bakic controls the largest single stake of 17.71% in the group, according to November 12 stock exchange data.

Djuro Djakovic's shares closed 4.41% lower at 5.20 kuna on Monday. They did not traded at opening on Tuesday.

(1 euro = 7.44375 kuna)