Slovak Machine Tool Maker Slovtos Enters Restructuring Amid Mounting Debt
Facing existential challenges after six decades in operation, Slovak manufacturer Slovtos has initiated court-approved restructuring proceedings in an effort to alleviate its growing debt burden.
Slovtos, a machine tool manufacturer based in Jasová, Slovakia, with a history stretching back to 1962, is attempting to navigate a precarious financial situation. Despite a temporary recovery following the economic disruption of the COVID-19 pandemic, the company now lacks sufficient reserves and is grappling with significant debts. The restructuring, authorized by the Nitra district court, aims to provide a pathway for debt relief.
According to filings with the Register of Bankruptcies, Slovtos submitted a proposal for restructuring authorization approximately two and a half weeks ago. The process will involve assessing the company’s ability to repay at least half of its outstanding claims to creditors. Failure to meet this threshold could lead to asset liquidation rather than restructuring.
The company’s workforce has already been significantly reduced, currently standing at fewer than twenty employees, down from nearly twice that number. “The company already lacks reserves and is catching up with a drop in orders,” a report from Diary of E. noted.
Slovtos first encountered financial difficulties during the pandemic in 2020, experiencing a loss of 48,000 euros and a 75% decline in sales, plummeting from one million euros to 250,000 euros. While the company managed to stabilize its position in the following years, achieving modest profits between 2021 and 2023 with annual sales around 800,000 euros, a downturn occurred in the previous year. In 2023, Slovtos reported a loss of 21,000 euros with sales falling to under 600,000 euros.
Currently, the company owes 23,000 euros to the Social Insurance Company and an additional 12,000 euros to two health insurance providers. Management has yet to issue a statement regarding the situation or outline a plan for stabilization.
Founded as the Slovak branch of the Czech machine tool manufacturer Tos Kuřim in 1962, Slovtos evolved to produce modern NC machine tools in 1990. The company was formally established as SLOVTOS in 1997, taking over the production portfolio of TOS, and later expanded into CNC machine tools at the turn of the millennium.
A change in ownership occurred in 2017 with the arrival of new investors – Bratislava-based companies CFG and L&L.com. CFG specializes in business consulting, while L&L.com focuses on restructuring financially distressed companies. Slovtos provides a range of services including CNC cutting, machining, grinding, and thermal treatment, and has previously supplied components to manufacturers in Austria and Germany.
The future of Slovtos remains uncertain as the restructuring process unfolds, but the company’s long history and specialized capabilities suggest a potential for recovery if a viable path to financial stability can be secured.
