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Ozeta Neo textile plant closes its gates

THE TOWN of Tornaľa's rescue plan to keep the local textile firm Ozeta Neo afloat has failed for now.

The company closed its gates on August 31, leaving all 618 employees jobless.

The firm was the largest single employer in Tornaľa, which suffered from an unemployment rate as high as 30 percent, the Hospodárske Noviny daily wrote.

Tornaľa deputy mayor Gyula Mészároš told the TASR newswire that the town needs to reach an agreement with the Penta private equity company, which owns Ozeta Neo, before it can take over the company.

But now the town is only interested in obtaining the company, not the employees. This is because trade unions have entered the game. They won severances not only for the 240 employees who lost jobs in Ozeta Neo, but also for 378 positions that the town originally said they would take over as part of the deal.

"The original price for the company is not valid any more and Penta requires a certain increase in the price," Mészároš told TASR. "The original price was to have been between Sk40 million to Sk50 million (€1.2 million to €1.5 million).

The town planned to keep the textile production in one of the production facilities. Other facilities were to make different products.

"But our negotiations are not over yet. The mayor will keep negotiating with Penta representatives," said Mészároš.

Ozena Neo financial director Martin Ťapay told TASR that the company has paid a total of Sk14 million in severance payments and other bonuses to former employees.

In mid-July, the town council submitted an offer to the Ozeta management in which it offered to take over the company and about 370 positions.

"Mr. Mayor confirmed this publicly in front of the employees," Ťapay said.

On the basis of this promise, Ozeta prepared at its own cost a technical solution to keep the factory running. After negotiating with clients, it also secured orders based on the proposed number of employees.

"Alas, in spite of many reminders from our side, the town did not make any active steps to take over the company as of September 1," Ťapay said. "Thus we were forced to make mass lay-offs to the full extent."

The original price of the company offered to the town was reduced to compensate for the 370 positions the town said it would take over.

"Today, in light of the fact that the mayor has proposed the change in terms of the sale so that the town will not take over the employees, we are ready to sell the company for a price that reflects the realistic value of the real estate and technologies," Ťapay said.

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