Ljubljana, 07 June (STA) - Following reports that builder Cestno podjetje Ljubljana (CPL) would come to the rescue of the troubled construction giant SCT, CPL's management board on Tuesday decided against becoming a partner and majority owner of SCT, making receivership inevitable for SCT.
"Thus the story is over as far as we're concerned and we're not entering the ownership structure," head of the CPL management board Stanko Petric told the STA after the board's session.
"In these times of crisis, we could jeopardise our own security by entering this giant," he added.
This does not bode well for SCT, until recently the country's biggest construction company, which has been undergoing debt restructuring since 25 January.
SCT, which has been tasked with supplementing its debt restructuring proposal, faces receivership if it fails to raise the cash to pay out outstanding salaries and severance pay by 14 June.
SCT crisis manager Dusan Mes said that the SCT management board would meet on Wednesday to decide on future steps. He said he did not support the further delaying of receivership.
He believes that all options to avoid receivership had been exhausted in the past month and that the company would not be able to pay off its workers by 14 June. "There is not enough time. I see no solution in these five days," he said, adding that SCT would however not withdraw the proposal for debt restructuring.
CPL was reportedly ready to chip in the necessary EUR 10m for a capital increase in SCT and provide another EUR 20m in operating capital, but was put off from assuming the role of SCT's saviour by demands from the banks to cover SCT's bank guarantees.
According to Mes, banks demanded that CPL assumes EUR 110m in SCT's bank guarantees. "CPL can't afford this. I too believe that CPL should not risk getting into the same trouble in two or three months on account of SCT," Mes said.
Among the banks that face the cashing in of the most SCT guarantees is the state-owned NLB.
"They've assessed that the risks are too big," Jure Kranjc of CPL, who headed the talks with SCT, commented on today's decision of the CPL management board.
Some 760 workers will lose their jobs as receivership gets under way at SCT.
Since the beginning of debt restructuring EUR 22-23m in bank guarantees have been cashed in, while more than EUR 150m in guarantees are yet to be covered, most by the NLB, Mes explained.
The maximum potential debt of SCT thus stands at some EUR 450m, he added.
Marija Magdalena Santl, who is in charge of debt restructuring at SCT, said that the entire group employed 1,500 workers, while another 10,000 to 15,000 people in related companies and branches will be at risk of losing their jobs as a result of receivership.