Prestigious Turnaround of the Year Award for the Recovery of the VEBA Textile Factory
Prague, 12 August 2020 – One of the major Czech restructuring projects in recent years, recovery of the VEBA textile factory based in Broumov, received the prestigious 2020 Small Company Turnaround of the Year Award. The award is granted by TMA (Turnaround Management Association), an international association serving corporate renewal. The restructuring of VEBA also entailed preserving 600 jobs in a region with the flagging economy.
“An elaborate restructuring plan prepared in cooperation with the CERHA HEMPEL law office helped us persuade creditors and investors to save the 160-year history of an enterprise with unique know-how. This was also facilitated by a favourable regulatory environment for restructuring in the Czech Republic,” said Radim Baše, Director at Deloitte responsible for restructuring services.
Aside from Deloitte and CERHA HEMPEL being involved in the recovery on the part of the debtor, investor Otakar Moťka and the ŽIŽLAVSKÝ law office, bank creditors Citibank, ČSOB, UniCredit Bank, Komerční banka and Raiffeisenbank as well as Josef Cupka as the insolvency administrator also participated in the process.
VEBA is a traditional Czech producer of jacquard woven cotton fabrics and ranks among the few global manufacturers of premium African brocade. At the turn of 2014 and 2015, the company encountered difficulty due to an economic downturn on key markets and its situation deteriorated due to a number of unexpected events, including the passing away of its co-owner and long-term CEO, which ultimately resulted in the company’s insolvency in 2018.
In 2019, VEBA’s creditors approved a restructuring project, which included, inter alia, involvement of a financial investor. Thanks to the new management, VEBA got in the black and this year, it has officially left the insolvency regime. This preserved 600 jobs and the tradition of textile production in North-Eastern Bohemia, which is a region with high unemployment. Among other things, TMA awarded the comprehensive restructuring plan and VEBA’s ability to continue its operation throughout the entire restructuring process.
More information (in English) about 2020 TMA Turnaround and Transaction of the Year Award is available here.