Production at Jeep Commerce starts soon - Plan for biggest reorganization in Serbia comes in effect

Implementation of Belgrade-based Jeep Commerce`s pre-prepared reorganization plan officially started January 14th, after it came in effect on December 31st, 2012. This document, adopted by creditors and confirmed by the Belgrade Court of Commerce back in July 2012, outlines actions to take to conduct the biggest remedial reorganization in Serbia, given that the debts of Jeep Commerce are in excess of EUR 50 million.

This company, one of the leading manufacturers of welded pipes and steel and aluminum profiles, will be revitalized with the help of its strategic partner - Interkomerc, and all its liabilities to creditors will be paid.

The competent court`s decisions to commence bankruptcy proceedings, confirm the adoption of the reorganization plan and dismiss bankruptcy proceedings must be duly delivered to every creditor covered by the reorganization plan.

- Considering that Jeep Commerce has over 2,000 domestic and foreign creditors, it took quite a while to deliver all these decisions, which is why the reorganization plan became effective on the last day of 2012. However, regardless of how time-consuming that process was, a clear signal is sent to the public in Serbia that the debt problems of the economy sector, which escalated due to a global crisis, can be solved in a comprehensive and quality manner, by means of the institution of bankruptcy reorganization, as long as there is readiness and good will of creditors to give debtors a second chance – Nemanja Nikolic, legal advisor at the consulting company WM Equity Partners from Belgrade and the leader of the Jeep Commerce reorganization project, says in a talk with eKapija.

(Nemanja Nikolic)

Vladimir Pavlovic, director of WM Equity Partners, also believes that it is possible to conduct a successful reorganization in Serbia and put a company that celebrates its 15th anniversary of operations in 2013 and employs about 350 workers back on its feet.

- The pre-prepared Reorganization Plan of Jeep Commerce is the largest project of the kind in Serbia supported by relevant participants, including most business banks in Serbia, government, and local and foreign suppliers. Reorganization represents an alternative to bankruptcy and eliminates the need for selling the property for next to nothing and leaving the workers jobless. However, it is an extremely serious project where the acceptance of the Plan by creditors is only the beginning. The hardest part of the work is to implement the reorganization plan, and that will be the only measure of success of bankruptcy reorganization projects in the years to come - says Vladimir Pavlovic.

Director and co-owner of the Jeep Commerce company, Dejan Dzipkovic, says to our web portal that he is satisfied with the Plan, given that the company`s technological and technical capacity will be maintained in that way. According to him, production is expected to start soon, and the plan is employ 100 percent of the capacity.

Dzipkovic says that the company has not laid off any of the workers, adding that it will hire about 30 people in the near future because another production shift is going to be added soon.

The key measure in the Reorganization Plan for Jeep Commerce is the rescheduling of debts under very favorable terms. Current employees will continue to work, while Interkomerc will help by providing raw materials.

- Construction of South Stream gas pipeline is expected to raise the demand for our products – Dzipkovic adds.

Jeep Commerce was established in 1998. The company opened a new factory for producing steel welded pipes in Zemun in 2005, with the capacity of 40,000 tonnes per year. It is the only manufacturer of metal barrels of 200 liters in Serbia and produces 60,000 such barrels a year. At the time when it operated without financial problems, like it was the case in 2009, the share of Jeep Commerce in the production of welded pipes in Serbia was 53 percent, that is, it annually produced 30,230 tonnes of these pipes. Buyers were the largest local metal-processing and construction companies, whereas 10 percent of production was exported.

The company started to sink in Q4 2008 due to the global economic crisis. At that time, Jeep Commerce's stockpiles hit a record high. However, it had to adapt to the market and drastically lower the prices of its products, thus causing the profits to drop.

Over 65 percent of its liabilites to banks became due in 2011, when the company's account was blocked.

Jelena Djelic