Economy Minister Tomislav Coric said on Monday he hoped that the European Commission would green-light the proposed plan for restructuring the Slavonski Brod-based Djuro Djakovic metal and mechanical engineering group.

“We absolutely want Djuro Djakovic to survive. We support the restructuring plan,” Minister Coric told the press, underscoring the government’s commitment to providing assistance to the industrial group.

He said that further steps would be known after the EC gave its opinion on the restructuring plan.

The Jutarnji List daily wrote on Monday that the Czech investor “DD Acquisition” was willing to take over the Slavonski Brod-headquartered group provided that the Croatian government covered the debts in the amount of some 300 million, which the group had incurred in the last few years.

The newspaper also reported on the intensification of negotiations between the Croatian government and the EC about this company.

The restructuring plan envisages an increase of DD Acquisition’s interest from the current 18.8% to the level that will enable it to have full control of Djuro Djakovic Holding. In August, its management approved the agreement between the government, the EC and the Czech investor as the formula for the survival of the group.

This group employs 780 people and has a diversified industrial portfolio including defence, transport, industry and energy. The core business is the manufacturing of freight wagons for special purposes. The company is located in an area with high unemployment and low job creation.

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

In the first half of 2021, the Djuro Djakovic Group generated a loss of HRK 17.9 million, which is 7.5 million less than at the same time in 2020, when the group’s loss amounted to HRK 25.4 million.

Total revenue amounted to HRK 189 million, which is 25% more year-on-year. Operating revenue also increased by 25%, to HRK 185.77 million. Normalised EBITDA was HRK 23.5 million or 2.9 million more than in H1 2020.

The group’s financial statement released at the end of July shows that the group has managed to stabilise its business and generate an operating profit. Exports increased by 23.3% to HRK 138 million, accounting for 74.3% of total revenue. Overall consolidated expenditure in H1 amounted to HRK 206.93 million, up 17.3% y-o-y.

At the end of June, the group had contracts signed worth HRK 263.6 million.