Naklo, 16 September (STA) - Merkur, the hardware retailer, declared insolvency on Thursday. Chairman Bojan Knuplez said that the management board would draw up a restructuring plan and ask shareholders to provide fresh capital.
Knuplez explained that the loss of the biggest hardware and technical goods retailer in Slovenia exceeded half of all nominal capital, requiring the company to declare insolvency under Slovenia's laws.
The group employing more than 4,000 staff will now have to draft a restructuring plan. Knuplez said that the company would ask shareholders to provide fresh capital for restructuring.
However, he warned that debt restructuring was the more likely scenario, as a successful capital injection would require the company to raise several dozen million euros. Merkur will file a restructuring plan within one month.
Knuplez did not exclude the possibility of conversion of claims into ownership stakes. He would welcome any new owner as long as he can secure "firm foundations and responsibility".
Knuplez said he could not say as yet to what extent creditors, which include 18 banks and 1,500 suppliers, would be repaid.
According to him, the company established insolvency after reviewing the annual report for last year, the half-year financial report and input from various back office departments as well as external consultants.
The retailer's chairman stressed that insolvency had only been declared for the core company. There is no need for this at home entertainment division Big Bang, which is operating with a profit, whereas a similar move is not excluded for Mersteel, the metal wholesale business which is also part of the Merkur group.
Knuplez, who does not want to discuss concrete figures before the restructuring plan is drawn up, ensured the press that there was enough money for wages.
"This measure of declaring insolvency is only one step on a path that we have been walking on for a few months now. Negotiations, which are underway, will continue normally, as agreement with creditors is vital," chief supervisor Matevz Slapnicar meanwhile said.
Commenting on how Merkur found itself in this situation, Knuplez listed several elements, including an inappropriate organisational structure, the crisis, the burdens related to the management buyout and the downturn on markets.