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The famous Greek company Nutriart ABEE producing bread and bakery products under the Katselis brand has declared bankruptcy thus infuriating its 480 employees. In the middle of this week, the company management announced that it would suspend its activities but would continue to pay the salaries of its employees until 18 September this year, when it is expected that the Athens court will consider at first instance the company’s application for bankruptcy.

"All employees want to continue working in order for the production not to stop," pleaded George Arvanitis, chairman of the union of employees. He insists that the employees should continue working since they will continue to receive salaries until September and that, in the mean time, the management should find a solution to prevent the company from going bankrupt.

The deepening of the crisis and the serious delays in the restructuring of the obligations to the banks are the two main reasons for the bankruptcy as announced by the company in a statement to the media. It points out that the company can no longer pay its debts to banks and suppliers and is therefore forced to cease operations.

The majority shareholder in Nutriart ABEE is Tinola Holdings which, from 2009 to today, has financed the company with 46 million euro as reported by To Vima. The sharp deterioration in the Greek economy, the decline in sales and increase in the tax burden have played a crucial role in the current state of the company.

In 2011, the company had negotiated for eight months to restructure its financial obligations which had not yielded the desired result. In 2013, after another nine months of negotiations with its lenders, the company agreed to a second financial restructuring plan which was unsuccessful again. A few weeks ago, Nutriart ABEE announced that it was preparing to sell its Allatini flour production plant in order to be able to continue to operate but this did not help either. The company is now anticipating that the court will accept its application for bankruptcy which will enable it to start the liquidation procedure.

"The message about Katselis’ failure is another proof that the success story of Samaras is nothing more than wishful thinking for real business in the country," Euklidis Tsakalos, a deputy of the opposition SYRIZA party, comments on the issue.

Nutriart was created in 2008 when three of the largest companies in the Greek food industry (Katselis sons, Allatini and Elvipet) merged. Allatini was one of the oldest companies in the country established in 1836 and until recently, it was a leader in the production of high-quality flour. Elvipet with established Plaza branded products specialized in the production of semi-finished and frozen puff-pastry products and Katselis was one of the best-established bakery companies with a huge chain of bakeries.

Despite its long history and the strong presence of its brands in the foreign markets in Southeast Europe, Nutriart could not withstand the pressure of the crisis and declared bankruptcy. Currently, the company's employees are trying to secure assistance from the government in order for the process of liquidation to stop. There is no official information as to whether the company will receive state aid or other support to avoid being closed permanently.