Mechel Târgovişte to lay off 512 employees

The Mechel Târgovişte plant (symbol: COS) will lay off 512 of the approximately 512 of the approximately 2,000 employees, due to its reorganization of its activity. The laid-off employees will receive a notice of 20 days, as well as severance pay amounting to three gross wages.

The management of the company said the following in a report sent to the BSE: "Considering the economic status of the company and the firm intention to reorganize the company, the downsizing of the staff was necessary according to the forecasted output volume, in order to ensure the success of a reorganization plan. Because of that, starting with March 1st, 2013, the management of the company together with the representatives of the receiver have given notices to 512 employees whose positions were eliminated due to the approval of a new personnel scheme. The employees who were given the notices will be laid off (...) and will receive a notice of 20 working days, as well as severance pay of three gross wages".

Last year, the plant of Mechel Târgovişte had revenues of 941.3 million lei, which were 12.3% lower compared to the amount of 1.07 billion lei reported for the previous year, according to a statement remitted to the Bucharest Stock Exchange (BSE). The plant ended the year 2012 with losses of 104 million lei, compared to 138.3 million lei, representing the value of the losses recorded in 2011.

Mechel Târgovişte, which is now insolvent, was part of the Russian group Mechel, which announced in February that it has sold its Russian assets to Invest Nikarom, a company owned by Viktor Chumakov and Svetlana Chumakova, both Russian citizens.

The deal, concluded for the symbolic amount of 230 lei, concerned the transfer of the companies Mechel Câmpia Turzii, Ductil Steel Oţelu Roşu, Ductil Steel Buzău, Laminorul Brăila and Mechel Reparaţii Târgovişte.

The approximately 2000 employees of the plant of Târgovişte have been technically unemployed since December 2012. The company recently announced that it had resumed operation at the division for the preparation of materials, and by the end of March, the eletric steel mill and the small profile rolling would be reactivated.