The Municipal Court in Prague declared glass company Bohemia Crystalex Trading (BCT) insolvent on 16 January 2009, according to the insolvency register website.
The glass maker and its subsidiaries h…
The Municipal Court in Prague declared glass company Bohemia Crystalex Trading (BCT) insolvent on 16 January 2009, according to the insolvency register website. The glass maker and its subsidiaries have been in insolvency proceedings since 22 September 2008 due to a lack of working 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 said. 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 16 March 2009 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 start of the insolvency proceedings. In mid-2008, the BCT group was still the largest 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 CZK 5.5 billion. However, the group of glass makers has been struggling with big debts for years and it owes CZK 2.7 billion 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 2008, BCT, Crystalex Novy Bor and Sklarny Kavalier were protected against creditors by a moratorium which made it possible for the companies to continue manufacturing. Now, however, Kavalier is the only one still producing, although it is also insolvent. Crystalex had to shut down production in the week ending 11 January 2009. Creditor banks withdrew all cash at the end of 2008 and Crystalex has no money to finance production or pay wages. It announced a lay-off 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 2008. Both companies are bankrupt and are searching for new owners. Their employees have been made redundant. “This seems to us as an orchestrated process aimed at wiping out the Czech household glass industry”, the union head Vladimir Kubinec recently told journalists.