Better days for Merkur Group - Mersteel successfully completes procedure of forced settlement and insolvency

The company Mersteel, a member of Merkur Group from Slovenia, is close to successfully ends the procedure of forced settlement and insolvency that it declared in late 2010, Zoran Cvijovic, director of Mersteel in Belgrade, told eKapija.

- A draft of the financial restructuring, which was presented by the new management first to owners and then to all creditors, has been adopted and the competent Regional Court in Kranj has informed the management that 92.4 percent of creditors voted for the proposed set of measures aimed at improving the current situation, regulating relations with creditors and enabling the continuation of normal operations at Slovenia's leading trader in metallurgy products - said Cvijovic.

By the way, all creditors who are in the procedure of forced settlement are offered two options to choose from. The first option is to convert their claims to an ownership stake, while the second one is to write off 45 percent of their claims and then collect the rest over the next six years.

Since business results are improving this year, a large number of creditors have lately decided to convert the debt into an ownership stake.

According to Cvijovic, trends are similar when it comes to the operations of the other, bigger division within the group - Merkur, so that it is expected that most creditors will over the next few weeks vote for the proposed set of measures and support the refurbishment and recovery of this company.

Since Merkur division also expects positive results from the operations in May, growing number of creditors are deciding to convert the debt to a stake in the company. Current estimates are that Merkur Group would be recapitalized in that way with 90 to 100 million euros.

Let us remind that the insolvency proceedings have never been introduced in daughter companies in Serbia (Meerstil d.o.o. and Merkur International d.o.o.), but the problems experienced by the mother company have definitely affected the operations of these companies. Therefore, the end of the forced settlement procedure and reestablishment of normal relations, primarily with suppliers, will bring a great relief to local companies as well.