Cheb, March 15 (CTK) – Czech lorry maker Tatra was sold to Truck Development company for Kc176m at Friday’s auction, and the reserve price was Kc175.14m.

The value of the company that was put under distraint at the request of Composite Com was set at Kc1.765bn as of Friday. Its debt amounts to Kc1.5bn.

One bidder took part in the auction.

“We are going to take over the company on Monday, March 18, already so that it is under our full control,” Truck Development board chairman Marek Galvas told CTK.

“We don’t expect any workforce cuts and want to maintain the current production capacity,” he said. “We want to stabilise the company as soon as possible and get on with all customers, suppliers and employees whom we don’t want to fire,” Galvas said.

Truck Development is ready to pay off all Tatra’s obligations immediately and within days sign a debt settlement agreement with Composite Com, the lorry maker’s biggest creditor, that submitted the distraint petition, according to Galvas.

“The company will continue to operate and fulfill all its obligations. We have prepared financing through loans in the order of hundreds of millions of crowns for this purpose,” Galvas said.

Galvas confirmed that Truck Development was set up recently with the aim of Tatra’s takeover. It was entered in the Register of Companies a week ago.

“Next week we’ll try to appoint a new management team of Tatra,” Galvas said, adding that the current members will not be its part.

Tatra now has only Kc160,207 on its accounts, according to a distrainer’s report.

The investment group J&T has provided money for Tatra’s acquisition. Galvas had worked for some companies linked to J&T. “J&T is financing a client as part of the acquisition of Tatra,” said J&T marketing head Petr Malek.

“Mr Galvas is not a direct employee of J&T,” he added without elaborating.

Galvas confirmed for CTK that J&T is behind Tatra’s acquisition. There are more companies, however, he said.

Distraint takes effect in 15 days and the remaining amount of Kc75m will be paid immediately afterwards, Galvas said.

Court distrainer David Koncz said the new owner has to pay for Tatra in two months. The participants in the auction and the winner can appeal the distraint proceedings in 15 days, he added.

Tatra owes around Kc650m to Composite Com. The firm uses the auction as a way to satisfy its claim. It believes the auction will help bring a strong investor to Tatra.

Composite Com PR agent Andrej Cirtek said Friday’s auction was apparently the first ever to deal with claim settlement at such a big company. He ruled out that Composite Com would be seeking an entry into Tatra.

“We only want to satisfy our claim and this is the fastest option,” said Cirtek.

Friday’s change of the owner aims to solve financial issues which hindered Tatra’s development over the past three years, said Tatra CEO Ronald Adams.

New products and new markets which Tatra had entered in this difficult situation may help Tatra return to the leading position it held before the industry was hit by the global financial crisis, Adams said.

According to him, Tatra’s auction does not have a negative impact on its operations.

Tatra retains its debt. The new owner promised Friday he would launch talks with all the creditors next week.

A museum with precious collections of historic cars will be preserved, said Galvas. The book value of the collections is Kc300.

All parties to the distraint proceedings were surprised that only one bidder took part in the auction.

Galvas said this could be due to an insolvency petition filed against Tatra this week. A regional court refused it on Thursday and so the auction did take place.

Tatra is a traditional manufacturer of lorries. Since 2006 it has been controlled by four Czech and foreign investors represented by the former member of the supervisory board and the current chairman of the board of directors, Ronald Adams of the USA.

Back in 2010 Tatra cut its loss of over Kc700m to Kc158m.