One of the Czech Republic’s flagship engineering companies, Vítkovice
Engineering, has said it has itself proposed insolvency proceedings. The
move was indicated Friday by details on the insolvency register.
Vítkovice Engineering early this week appeared to be lined up for a lifeline from the arms company of Czech businessman Jaroslav Strnad. He however announced midweek that he intended to invest in another part of the Vítkovice Group, Vítkovice Heavy Engineering. That move has been approved by a court.
Vítkovice Engineering employs around 650 in and around Ostrava. Many of them have been sent home since January and are waiting for unpaid wages. Operations at the firm have been interrupted because there is not enough cash to pay for raw materials or key components.
The Ostrava-based company Vítkovice Power Engineering which is undergoing reorganization under forced administration, is having to lay off around 300 employees. Most of them are currently employed at the VPE Hard daughter company which is being sold off. Vitkovice Power Engeneering had close to 1,500 employees when it came under forced administration in 2016 and is now down to just over 800 with further lay-offs in the pipeline. The company narrowly avoided bankruptcy at the end of 2015 after admitting it had over 700 creditors to whom it owed hundreds of millions of crowns.
After the sudden, if not totally surprising, announcement that long time Social Democrat stalwart Jan Mládek, would be dismissed as minister for industry and trade at the start of the week, Prime Minister Bohuslav Sobotka was expected to follow through by announcing a replacement on Thursday night. Those expectations were confounded.
A regional court in Ostrava was due Wednesday to deal with another application for insolvency regarding a company from the Vítkovice engineering group. The latest application focuses on Vítkovice Mechanika with the applicant, Wetag Invest, claiming it is owed 900,000 crowns. A court is already dealing with an insolvency application for one of the group’s flagship companies, Vítkovice Power Engineering. Around 500 creditors have already come forward claiming they are owed around 75 billion crowns. It faces major problems over a contract to build a power plant in Turkey.
The regional court in Ostrava has started bankruptcy proceedings against the company Vitkovice Power Engineering. Creditors have two months in which to file claims. According to earlier reports the company owes close to two billion crowns to over 700 creditors. The company filed for “reorganization” bankruptcy last week in what many see as an attempt of the mother company Vitkovice to retain some control over the bankruptcy proceedings.
Vítkovice Power Engineering, one of the key daughter companies of the engineering conglomerate Vítkovice, has filed for “reorganization“ bankruptcy. The company reportedly owes close to two billion crowns to over 700 creditors. The regional court in Ostrava, which was due to deal with a proposal for bankruptcy against the firm by one of its biggest creditors, Westag Invest, on Friday has cancelled the hearing.
Vitkovice Power Engineering has filed for “reorganization“ bankruptcy. The company owes hundreds of millions of crowns to over 700 creditors. It currently employs over 1,000 people. The regional court in Ostrava which was scheduled to deal with a proposal for bankruptcy by one of the firm’s biggest creditors Westag Invest on Friday has cancelled the hearing.
The government’s special representative for Moravia-Silesia says there is a real threat that steelmaker Vítkovice Steel could close and operations could shift to Russia. The company has rebuffed the comments but there’s little doubt that the steelmaker has still to recover from the sector's downturn.