Tungsram continues to make fulfilling its obligations to its employees, customers, suppliers and authorities a top priority, so the company took a step on Wednesday to provide the legal and financial protection that could resolve this conflict: It has sought bankruptcy protection. The company said they did it all
The company will still be able to pay wages and taxes under the umbrella of bankruptcy protection and carry out ongoing reorganization.
He also briefed workers, unions, labor councils and banks about the compulsory relocation on Wednesday, as required by law.
The management of the company will make every effort to continue operating the company based on the transition to a profitable business structure during bankruptcy protection. The goal has not changed from the goals announced in recent weeks: to create a smaller, more flexible and more competitive company focused on its innovative business,” Jörg Bauer, President and CEO, quoted Tongsram as saying. He also said
Protection from bankruptcy, contrary to popular belief, does not mean liquidating the company, but rather an attempt to ensure its successful survival.
“We didn’t plan for this step, but it gives us a chance,” added Jörg Bauer.
Tongsram: This is not the end of the company
The purpose of bankruptcy protection is to reorganize and for the operations of Tungsram Kft. agreement with its creditors. On the business day following the filing of the application with the court, the company receives a deferment of payment of its debts (deferred payment). It is important that the suspension of payments does not apply to, among other things, wages and other wage-related benefits (absence allowance), severance payments and other general taxes and fees levied on them, such that they must be paid during the bankruptcy proceedings. It is important that the company’s global production, service and business activities continue in operation.
The announcement also states that the company will create a reorganization organization, which will develop a sustainable financial plan for the reorganization and agreement with creditors with the participation of the trustee. They must seek to reach an agreement with their creditors within ninety days of commencing bankruptcy proceedings.
“For the process to be successful, it is essential that the trust of our employees, customers, suppliers and partners remain constant in Tungsram. Experience shows that if you have the confidence and belief, the process can be successful,” said Jörg Bauer.
Tungsram is a historic Hungarian brand on the path of innovation-based and future-oriented renewal, which we can sustain together!
In global markets, bankruptcy protection is not at all the end of the company, it is a fairly common procedure used to treat insolvency problems. In Hungary, the public perception is different, and here many people understand bankruptcy, although it is quite the opposite: the intention to save the company. Ssangyong, a Korean automaker, went through similar bankruptcy proceedings in 2020, with an English company now registered as its owner. It is also common on airlines, most recently Norwegian. The coronavirus crisis has brought many of these measures. And the company’s announcement concluded that one of the famous examples in Hungary is the bonus brigade, which was also put in a difficult situation due to the Covid epidemic in 2020, but agreed with its partners during bankruptcy protection, and is still operating today.
(Cover image: The production line at the Tungsram Group’s light source plant in Vácit, January 7, 2019. Photo: Noémi Bruzák/MTI)
