Tungsram goes into liquidation

Tamás Mehlhoffer, the company’s PR and communications director, said that Eximbank, as the largest creditor, did not accept Tungsram’s debt settlement offer, “and their vote is enough to prevent a bankruptcy settlement.” He added that a detailed statement on the developments will be issued on Tuesday.

Gábor Sallai, the president of the Independent Trade Union of Tungsram Workers, told the newspaper: everyone expected that the matter would be resolved, since the previous bankruptcy proceedings had been postponed and it was a company with a long history. In the spring, Tungsram still employed 3,000 people, today there are nearly 1,000 employees at the company. In addition to the downsizing, according to him, many people left the company on their own. In the Budapest factory, for example, hundreds of people had been on downtime for months, working for minimum wage and not even receiving shift allowance.

At the end of April, the large Tungsram lighting company announced that it would end the production of traditional lighting products, and therefore lay off 1,600 employees in several stages until the end of the year. In the following months, a total of almost two thousand people were laid off. The downsizing mostly affected factory workers in all five of the company’s factories, i.e. in Budapest, Hajdúböszörmény, Kisvárda, Nagykanizsa and Zalaegerszeg.

The company filed for bankruptcy protection at the beginning of May, after the company’s largest creditor, Eximbank, filed a collection order against the company’s bank accounts. At that time, the company was still optimistic based on the reports, saying that it respects the bank’s decision, but this does not mean the end of its operations.

On August 8, Tungsram presented its first recovery plan, which was accepted by most creditors, but not by the largest, Eximbank. The second bankruptcy procedure was held today, November 7. Tungsram negotiated with both domestic and international investors, including Switzerland’s Business Creation, which is experienced in crisis management of companies. However, according to the newspaper, the meeting between the parties did not take place until Friday of the previous week, meaning that Exim did not accept Tungsram’s bankruptcy settlement offer.

Since no settlement was reached at today’s hearing either, the company will be subject to liquidation proceedings. In the process, according to Világgazdaság, all of Tungsram’s assets will be sold.