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State Provides EUR 10M Capital Injection for Troubled Nafta

Lendava, 13 May (STA) - The management of state-owned oil company Nafta Lendava confirmed on Friday it had launched a financial restructuring on group level with the help of a EUR 10m financial injection from the state. Although planning to lay off 30 to 40 workers, Nafta hopes to preserve 400 jobs and prevent bankruptcy.

The Nafta group consists of eight companies, with positive results by six of them failing to offset the EUR 9.7m loss recorded in 2010 by the subsidiary Nafta Petrochem, a chemical company.

Nafta Lendava Cveto Zalik chairman told the press in Lendava (NE) that the company, which also plans to reshuffle ownership shares among its subsidiaries as part of the rescue effort, was only left with three possibilities: receivership, debt settlement or a capital rise.

Zalik said that they had managed to convince the owner, meaning the state, that the restructuring programme would succeed and that EUR 6.6m in aid had already been transferred.

Nafta plans to address the problems with Nafta Petrochem, which has been struggling with excessive prices of raw materials, by possibly selling it. It wants to identify and hold on to the healthy segments of the company and establish three new subsidiaries.

The restructuring plan has been endorsed by Nafta's supervisors as well as by the State Assets Management Agency. It identifies the reasons for the problems, and sets down plans for technological, financial, market and personnel restructuring with the goal of securing long-term survival.

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