Economy Minister: The government will help Djuro Djakovic Group

Economy Minister Darko Horvat repeated on Wednesday that the government would financially help the Djuro Djakovic mechanical engineering group by January 17, the deadline for unfreezing the company's bank accounts.

In late December the minister said that a medium-term solution for the company would be a loan which the government was willing to support with guarantees in the amount of some 150 million kuna (€20 million).

The loan would help unblock frozen bank accounts of companies within the Djuro Djakovic Group that are currently blocked, Horvat said at the time, noting that the loan would also secure liquidity for the completion of current jobs that the group has agreed with three clients.

Once the products commissioned under those contracts are finished and delivered, an additional 128 million kuna (€17.2 million) will be secured for the company’s survival, Horvat had told reporters in December.

Based in the eastern Croatian city of Slavonski Brod, Djuro Djakovic Group is a major engineering company which makes industrial and infrastructure equipment, heavy machinery and vehicles such as locomotives. In 2018, the group posted consolidated revenue of 466 million kuna (€63 million), with a net loss of 26.4 million kuna (€3.5 million).

The group, in which the government is the largest shareholder with a 38 percent stake, neared bankruptcy in December last year, when its accounts were frozen due to some 100 million kuna (€13.4 million) in unpaid bills to suppliers. From its heyday as an industry giant in the 1980s when it employed some 18,000 workers, today the company is reduced to some 1,000 employees.

The Djuro Djakovic Group said on Tuesday that Hrvoje Kekez had been appointed the new chair of its management board for a term of six months, to last until July 7. Asked about the future of the company under the new management, Horvat said that he was certain that the prospect of the company’s restructuring during Kekez’s term was good.

(€1 = 7.44 kuna)