Nearly eight decades after its founding, SEZ Krompachy, a major eastern slovakian manufacturer of electrical components, has entered insolvency proceedings. The company self-reported financial difficulties and now faces over €5.4 million in debt, threatening the livelihoods of its 246 employees and the economic stability of the Krompachy region. Despite the bankruptcy filing, production continues as administrators seek a new investor to potentially salvage the plant and prevent its closure. The case also raises questions about the fate of an €858,000 grant from the Ministry of Economy.
SEZ Krompachy, a nearly eight-decade-old electronics manufacturer in Slovakia, entered insolvency proceedings earlier this year after self-reporting its financial difficulties. The company, a well-known presence in eastern Slovakia producing circuit breakers, switches, and switchgear, now faces mounting debts totaling 5.4 million euros. The coming months will determine whether a new investor can revive the plant or if it will be forced to permanently close its doors.
Creditors have filed claims totaling 5.4 million euros, according to a report from Index. UniCredit Bank holds the largest claim, amounting to 3.43 million euros.
The Ministry of Economy is also seeking the return of an 858,000 euro grant awarded in 2020 for a project focused on research and development of electrical protective devices compliant with UL standards for use in photovoltaic applications. The ministry considers the company’s bankruptcy filing a breach of the grant’s conditions.
Additional debts include approximately 181,000 euros owed to the Social Insurance Agency, 50,000 euros to the city of Krompachy, and outstanding balances to firms such as UniCredit Leasing Slovakia, Top Steel, U.S. Steel Košice, Kamat, and Geis SK. The company also owes 23,000 euros in taxes to the state and a combined 24,000 euros to two health insurance providers.
A claim of over 3 million euros from British firm Techna International, representing penalties for non-delivery of goods and testing costs, has also surfaced. However, the bankruptcy administrator has disputed the validity of these claims.
Investor Sought as Production Continues
The bankruptcy administrator has identified assets worth 5.1 million euros, offering creditors some hope of recovering at least a portion of their claims. These assets include real estate holdings, buildings, and land. The fate of SEZ Krompachy hinges on attracting a new investor, which could allow the company to continue operations after eight decades in business.
Despite the insolvency proceedings, production at the factory continues. “The debtor SEZ Krompachy continues to operate even after the bankruptcy was declared, providing work for a total of 246 employees,” said Jaroslav Jakubčo, a partner at UBC 2020, the newly appointed bankruptcy administrator. “As the new administrator, we will strive to maintain operations and find an investor to purchase the company through a public tender process. We anticipate that any investor will preserve employment and continue operations.”
Recent Losses Follow Previous Restructuring Efforts
Company management stated in late June that the bankruptcy was a result of declining investment in Slovakia. SEZ Krompachy reported a loss of nearly 1.3 million euros in the previous year, with revenue of approximately 10 million euros. In the first six months of this year, the company recorded a loss of 275,000 euros, bringing total losses since 2020 to over 5 million euros.
The company previously attempted to address its financial difficulties in the summer of 2022 by seeking restructuring to reduce its debt burden. Creditors, including UniCredit Leasing and UniCredit Bank, ultimately approved a restructuring plan that was later confirmed by the court. The plan outlined a repayment schedule extending to May 2028. However, the company failed to meet the terms of the plan and subsequently filed for bankruptcy this year.
- SEZ Krompachy – a manufacturer of low and high-voltage electrical equipment used for protection and control of electrical circuits, has been in operation since 1948.
- The company operates its own tool shop and a subsidiary, SEZ Plaset, specializing in plastic components.
- Its products are exported to Europe, Asia, and other distant markets.
