At the August 11 meeting of the VSŽ Board of Directors, three members resigned - Ladislav Drábik, Ján Valenčík and Sergej Zápotocký. The company did not comment on the reasons for their resignation.
Drábik was VSŽ Vice President for Human Resources, Valenčík served as VP for Restructuring and Zápotocký was VP for Marketing and Sales.
In early November 1998, VSŽ representatives admitted that growing problems in the global metallurgical industry had hurt VSŽ, and that they expected to end the year in losses. They stressed the need for VSŽ to focus exclusively on metallurgy, to reduce its labor force, and to give up its stakes in financial institutions.
The warning was underlined when VSŽ defaulted on a syndicated loan of $35 million arranged by Merrill Lynch. Merrill Lynch used its right to call in the loan after three years, a decision associated with a general trend of large international banks to reduce credit exposure on emerging markets. Thus, the steelmaker found itself near cross-default last November, and has since been trying to stitch together a stand still agreement with banks and the Slovak government.
