Tržič, 27 August (STA) - The state owners of shoemaker Peko approved Wednesday the payment of past losses through a EUR 4.7m reduction in capital as the company continues on the road to recovery.
The decision was put forward by the Slovenia Sovereign Holding, the custodian of state assets, as part of the ongoing restructuring at the cash-strapped company.
While this confirms that Peko does not need emergency funding from a private partner, the AGM also confirmed a proposal to give the management authority to find a private partner for a 30% stake in the company in two years.
The sale of the shares to a private partner would raise around EUR 2.6m needed for development. General Manager Slavko Despotović said that a private partner was currently not knocking at the door, but that efforts would be launched to find one in the coming weeks.
Despotović had announced already in July that the company would likely be able to pull through without an investor because recent measures enabled it to boost production and sales.
As part of today's operation, the state-owned fund DSU also provided a EUR 500,000 capital injection in kind to bolster the total capital of the company to EUR 6.6m.
Meanwhile, the state shareholders also voted to reject a discharge of liability to the previous management board, deeming it did not take appropriate measures to stop the bleeding of cash at the company.
However, a forensic audit of past operations will not be conducted as initially planned. Despotović said this was because of the cost involved with such an audit, which Peko could not afford in the current conditions.
The group around Peko made a loss of EUR 5m last year on around EUR 30m in revenues. Despotović, who took over in July 2013, said the loss was smaller than in earlier years.
He reiterated that things were looking up for this year, as the group had sold a total of 120,000 pairs of shoes, which is on par with the whole of last year. It has also returned to profit with the help of the sale of real estate, which it is using to provide liquidity.
In addition to the sale of unneeded real estate the company is increasingly outsourcing its production to countries with cheaper labour.
The company currently employs 260 staff in its Tržič plant, while it has a strong presence in Serbia.