Ostrava based steel manufacturer Vítkovice Heavy Machinery (VHM) has gone bankrupt, the Regional Court in Ostrava announced on Friday.

Rumors of a possible bankruptcy were already present at a company creditors meeting last week, the Czech News Agency writes.

According to the court, there are several reasons for VHM going bust. A company reorganisation proposal, which was originally put forward by the majority shareholder CE Power Industries, was taken back after VHM’s business activity was severely impacted by the epidemiological situation and coronavirus containment measures. Furthermore, the company discovered it does not have sufficient creditor support to initiate a reorganisation

VHM currently owes more than CZK 1.7 billion, insolvency administrator Lukáš Zrůst told the Czech News Agency. As of June, the company employed more than 560 workers, he says.