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Vegrad Withdraws Debt Restructuring Proposal, Goes Into Receivership (adds)

Celje, 30 September (STA) - The management of the insolvent builder Vegrad withdrew its proposal for debt restructuring from the Celje District Court on Thursday, which suggests that the company is going into receivership.

While the court has eight days to decide on the withdrawal, "it does not have any real maneuvering space here, which means that Vegrad is going into receivership", Vegrad's outgoing chief supervisor Klemen Bostjancic confirmed for the STA.

Thus Vegrad head Boris Medved, who took over on 30 August and has not been available for comment, established that the debt restructuring plan put forward by his predecessor Hilda Tovsak was not feasible.

The news comes amid a strike by workers, who have not been receiving wages, and after debt restructuring started at Vegrad on 1 September, with creditors having until 1 October to register their claims. The restructuring plan put forward by the former management put debt at EUR 240.7m.

Calls for receivership have been growing increasingly loud. They also came from the disgruntled workers as well as from Prime Minister Borut Pahor, who said after today's government session that the management should not be putting off receivership, above all for the sake of the workers.

Once Vegrad, which employs around 1,000 workers, is in receivership, Pahor and Economy Minister Darja Radic plan to propose certain solutions that could help Vegrad recover at least partially.

Trade union representative Srecko Cater told the STA today that the strike at the company, underway since last Monday, has been suspended for two days.

Paid absence of work has been secured for Friday and Monday, after which the strike will continue until the demands - payment of salaries for all workers of Vegrad and its subsidiaries - are met, Cater added.

The problems of Vegrad, which used to be one of the biggest Slovenian construction companies with a workforce of 1,700, escalated this year and resulted in banks blocking the accounts of the company in February.

This led to a further deterioration in salary payments, while voices also began to be raised by Vegrad's suppliers and subcontractors. A major delay occurred in the construction of the the Celovski dvori residential complex in Ljubljana.

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