Beohemija-Inhem bankruptcy – Reorganization plan fails, bankers “cleaning up” the mess

The Commercial Court of Zrenjanin reached the decision yesterday (May 27) to open bankruptcy proceedings in the company for making and selling detergents JSC Beohemija-Inhem.

The Court has, in fact, accepted the request made by AIK and Sberbank in March this year, when the so-called previous bankruptcy proceedings were opened. The bankers insisted on the bankruptcy of the local household cleaning products giant due to its failure to act and fulfill its obligations pertaining to the pre-packaged reorganization plan (PPRP). The Court has deemed the bankers’ view that the application of the PPRP was seriously put in question to be justified and that the recovery plan provided by the management of Biohemija-Inhem is infeasible. Vasilije Jovanovic has been appointed administrative receiver.

It is not known what the creditors’ next move will be. Most likely, they will lease the Zrenjanin factory facilities with the help of the administrative receiver, in order for the production of powder detergents and household cleaning products to continue. Beohemij-Inhem, through its two brands Duel and Spin, still makes up almost a third of the local market. The factory did continue to operate even after 2013, when it faced significant financial difficulties, but it was burdened by debts and insolvency.

How the company made such huge debts remains a mystery, but the data from the last year’s PPRP made it clear from the start that it had little hope of “cleaning up” the mess made by its business activities. It was established that its total obligations exceeded 20.7 billion RSD, with the entirety of its movable and immovable property being estimated at 1.3 billion RSD. It turned out that, in case of bankruptcy and selling of the property, the creditors could recover only 7% of its claims, which made the PPRP a much better option.

Zeljko Zunic, founder and manager of Beohemija-Inhem, kept explaining that the company needed a ten-year break from loan repayment. In order to successfully carry out the PPRP, the company was counting on 15 mil EUR for the working assets, in addition to debt restructuring. That also meant the recovery of its companies – Hemija-Briksol from Vrsac and Dalija from Belgrade.