Croatia will issue government guarantees to help the troubled engineering and machinery firm Đuro Đaković. The government approved 300 million kuna in loan guarantees on Thursday.
“150 million kuna will go to lift the hold on their accounts, to resume production, and to complete pending orders. The other 150 million kuna will be used to purchase materials and pay suppliers,” said Economy Minister Darko Horvat. The funds must be used within six months following the initial withdrawal and no later than December 31 of this year, Horvat added.
Prime Minister Andrej Plenković said he had spoken to EU Competition Commissioner Margrethe Vestager about the guarantees. Under EU rules, member-state governments are allowed to provide state aid only with approval from the European Commission.
Finance Minister Zdravko Marić was asked how these guarantees differed from those the government granted to the Uljanik shipyard.
“Đuro Đaković is nowhere close to where Uljanik was. The amounts are incomparable. However, it is the principle that is important. We are carefully reviewing the lessons we learned from the case of the shipbuilding industry,” Marić said.
Đuro Đaković's new CEO Hrvoje Kekez said the next steps were to unfreeze the company's accounts, resume production, draft a strategic restructuring plan, and to try and live up to the government's expectations with respect to the trust that has been extended to them with these guarantees.
Based in Slavonski Brod, the Đuro Đaković is one of Croatia's largest engineering firms that makes industrial and infrastructure equipment, heavy machinery, and locomotives. In 2018, the group posted consolidated revenues of 63 million euros with a net loss of 3.5 million euros. The government holds a 38 percent stake in the firm.
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