SERTIC: PPRPs for seven companies, deals with creditors for four

(Zeljko Sertic) Neither one of 11 strategic enterprises, which will no longer have the state's protection from creditors starting this June, will declare bankruptcy afterwards, stated the Minister of Economy Zeljko Sertic on Saturday evening, May 28.

He stated for RTS that the Government, in cooperation with those enterprises, had enabled them to continue their economic life in the coming period, but also pointed out that neither one of them could count on state subsidies, which stopped being issued last year.

Sertic clarified that seven of the enterprises will do that through a Pre-Packaged Reorganization Plan (PPRP), while a deal will be made between the rest of the companies and their creditors to postpone the collection of claims.

The Minister said that most of those enterprises would have to reduce the number of employees and that many had already offered social programs to their workers.When asked how much the companies owed, Sertic said that 17 protected companies going through reorganization had a total 3.5 billion EUR of past debts.

- Those 17 companies, which used to employ around 22,000 people, had great potential in our view, and the fact that they are all functioning is the proof that we have chosen well – said Sertic.

Asked how many workers would accept the social program, Sertic answered that it depended on each company and cited the example of FAP from Priboj, where 627 of 650 employees had applied for it.

- This doesn't mean that the Government has given up restructuring FAP, nor searching for investors for that company – clarified Sertic.

The Minister reminded that, of 17 protected companies, the fates of six of them would be solved this way or another by January 1, and said that it was possible, due to that, that the other 11 wouldn't go bankrupt starting with June. He mentioned Simpo and Lasta, companies which were outside the protective system this year, yet managed to function, as he said.

Explaining different models, he said that the PPRP was actually a court's decision practically proving that your business dealings are now in the black.

The PPRP, as he said, is a model that has been accepted everywhere, with private companies also resorting to it. It has been accepted in the region as well, the Minister stated.

When it comes to deals with creditors, he explained that most commercial debts were towards banks.

- The property means nothing to them unless they can sell it in the market. This is why a deal was possible for the debts to be paid through debt restructuring. It's equivalent to the PPRP, except the deal has to be honored, because otherwise they will be declared bankrupt immediately – he said.

Sertic also said that today was a historical day, as it marked the first time that the state-owned companies were equalized with the privately owned ones, since formally, according to regulations, state-owned companies were no longer protected by the state.