The subscription for new shares in clothing manufacturer Varteks begins this Monday and runs until 11 June. By then, the company aims to raise a minimum of €100,004.76 and a maximum of €2,500,004.16 in fresh capital to overcome the financial problems it has run into.

The shareholders’ meeting of the Varazdin-based company decided on 21 May to increase the company’s share capital to a maximum of € 2,801,605.32 by issuing new shares.

The increase in share capital is to be secured by issuing a minimum of 9,579 and a maximum of 239,464 new ordinary shares. The subscription of the new shares will take place in a single round and the price of the shares has been set at € 10.44, with existing shareholders having no pre-emption rights.

The issue will be deemed successful if the company’s share capital is increased by at least € 100,004.76.

A plan to stabilise the company

Prior to the capital increase, the share capital will be reduced by resolution of the Annual General Meeting in order to cover the company’s losses through the consolidation of shares. The share capital is reduced from € 6,671,558 to € 301,601.16.

The costs of the share capital reduction will be borne by the company.

At the beginning of May, the workers of this company, which is a trademark of the northern city of Varazdin, went on strike over overdue wages. They ended their industrial action on 14 May after receiving guarantees that they would receive their overdue wages and after an agreement was reached between the new management and the shareholders and the relevant trade unions.

Unaudited data for 2023 shows that Varteks made a loss of €4.43 million last year, while losses in 2022 totalled €3.1 million. Operating income fell by 15.1% to 14.6 million euros last year. At the end of 2023, the company had 633 employees.

The company also announced that last week it submitted a plan to Zagrebacka Banka and the Croatian Bank for Reconstruction and Development (HBOR) to stabilise its operations and made an offer that would allow it to obtain fresh money through recapitalisation and new loans to be used for production and payment of maturing debts, but the offer was rejected.