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Municipal court in Prague declares glass comp BCT insolvent

Post Time:Jan 19,2009Classify:Company NewsView:449

The Municipal Court in Prague declared the glass company Bohemia Crystalex Trading (BCT) insolvent Friday, according to the website of the insolvency register.

The glass maker and its subsidiaries have been in the insolvency proceedings since September 22 due to a lack of operating capital.

The declaration of insolvency comes as no surprise and the owners have been expecting it once the three-month moratorium was over, BCT group spokesman Karel Samec told CTK.

The BCT was a service and trade organisation for four subsidiaries.

Creditors now have 30 days to submit their claims.

A review of the claims and a meeting of creditors will take place on March 16, when solutions to the insolvency are also very likely to be decided upon.

However, the owners have been suggesting bankruptcy as a solution since the beginning of the insolvency proceedings.

In mid-2008, the BCT group was still the biggest producer of household glass and china in the Czech Republic.

It employed around 5,000 staff in total and in 2007 it made contracts worth Kc5.5bn.

However, the group of glass makers has been struggling with big debts for years and it owes Kc2.7bn to a consortium of banks.

Its situation has also been aggravated by the pressure of cheap Asian competition and the strong Czech crown, which deprived the BCT of hundreds of millions of crowns. The economic crisis has only made the fall faster.

Until the end of last year, the BCT, Crystalex Novy Bor and Sklarny Kavalier were protected against the creditors by a moratorium, which made it possible for the companies to continue producing.

Now, however, Kavalier is the only one still producing, although it is also insolvent.

Crystalex had to shut down production a week ago. Creditor banks have withdrawn all cash at the end of last year and Crystalex has no money to finance production or to pay wages. It announced a layoff of 1,631 staff to the employment offices and is now awaiting a declaration of insolvency.

The other two glass makers, Sklo Bohemia Svetla nad Sazavou and Sklarny Bohemia Podebrady, had already shut down production in September last year. Both companies are in bankruptcy and are searching for new owners. Their employees have been dismissed.

"This seems to us as an orchestrated process aimed at wiping out the Czech household glass industry," the unions' head Vladimir Kubinec has recently told journalists.

Source: CTKAuthor: shangyi

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