Insolvency proceedings have been started at the MLM foundry, days after the group failed to secure a capital injection through a debt-to-equity conversion.
The Maribor District Court instituted Friday debt restructuring at the parent company MLM at the request of chairman Boris Šlamberger. Šlamberger also announced that the board would file for the administration of the group's bathroom and kitchen fittings subsidiaries Sanitec and Armal.
In a press statement, the MLM chairman said he was confident the foundry group, which employs around 800 people, could be rescued through financial restructuring.The court appointed Blaž Štumpfl as administrator for debt restructuring, while creditors have until 27 May to file their claims. The move comes days after the group failed to secure a EUR 17.4m capital injection through a debt-to-equity swap that would have made three banks - NKBM, Abanka Vipa and Probanka - majority shareholders. Apart from the capital injection, the group also attempted to find a buyer for Sanitec and Armal, but without success.
Around 200 workers from the two subsidiaries staged a protest in the centre of Slovenia's second-largest city in response to Šlamberger's announcement. The workers first gathered in front of the NKBM bank headquarters before walking to the headquarters of Probanka and then on to City Hall. Sanitec workers have been on strike since Wednesday over unpaid wages and the management's inability to find a solution for their company.
A long-time trade unionists at the group said the developments at MLM were $shameful$. The company has been operating successfully for 89 years, while the current conditions are a result of the management's incompetence, Branko Medik said. Šlamberger meanwhile said he understood the workers' anger and added that the board was doing everything in its power to secure a future for the kitchen and bathroom fittings line.