After meeting with the management, workers and consultants at the Djuro Djakovic mechanical engineering company on Tuesday, Economy Minister Darko Horvat said that the latest government guarantee for the company was the company's last chance as there would be no more government aid.

The meeting was held after the European Commission last Friday approved a second tranche of a government guarantee for a 300 million kuna (€40 million) loan for the restructuring of the Djuro Djakovic group.

“The (EC) decision confirms that nothing we did for the company was in contravention of the EC strict rules, directives and guidelines. The first tranche of 150 million kuna was used to unfreeze the group’s account, to pay workers wages and to partially cover the costs of suppliers. We have been given legitimacy to spend the next 150 million kuna to restructure the concern and put it on the right path where there will no longer be any opportunity for state support. This is the last chance for Djuro Djakovic’s workers, unions, management…. There is no more help from the state,” Horvat said.

He added that restructuring would take two to three years, to be followed by efforts to find a strategic partner with which to look for new contracts on the global market.

Reporters were interested whether it was realistic for the company to repay the 300 million kuna. Horvat said that this would be clearly presented to a potential strategic partner and that the money would have to be repaid.

President of the Management Board Hrvoje Kekez said that the remaining 150 million kuna would enable the continuation of production at the group’s special vehicles plant which currently has orders for the period until the end of 2021.

“We presented the minister with a draft restructure programme which we will finetune with the ministries of economy and finance… and then submit it to Brussels for approval,” Kekez explained.

Once the group is restructured, it will have about 700 employees, he added.

The European Commission on Friday approved the government’s decision to grant the Djuro Djakovic group a state guarantee for a 300 million kuna loan to meet urgent liquidity needs and continue its activities, without unduly distorting competition in the single market, the Commission said then.

Djuro Djakovic is facing difficulties due to internal and external factors, to a large part related to the cutbacks in national military spending in the last few years.

(€1 = 7.56 kuna)