Share this page

Cupcakes, cookies, and chocolates from Pingvin—known throughout Bosnia and Herzegovina for its sweet confections—have topped tables around the region since the company was founded over two decades ago. But when a flood ravaged Pingvin’s factories in 2014, destroying everything from ingredients to ice cream makers, the consequences were far direr than a missed dessert.

That’s because the livelihoods of Pingvin’s workers—18 out of 19 of whom are women—were under threat as company profits fell. Bankruptcy laws in Republika Srpska, where Pingvin is based, were not very well-developed until recently, and struggling companies would often be forced to close their doors.

"I could not find my way out of all those problems," says Pingvin’s owner, Slavica Grebenar." I saw that Pingvin was slowly collapsing."


In 2016, though, Grebenar discovered a better option than bankruptcy: a new insolvency law that made it possible for her to restructure the company with a temporary reprieve from creditors. IFC helped Republika Srpska adopt the law, which offers companies more protections as they rebuild operations. For companies that do ultimately declare bankruptcy, the law shortens the process to 11 months from 33 months—which helps owners, workers, and local economies achieve solid footing sooner.

The law allowed Grebenar to refinance Pinvgin’s debt, request extensions from creditors, and secure loans to pay down obligations. Just three years after the legislation was adopted, Pingvin is thriving again. It recently landed a major contract with a Serbian company, which has brought its revenues close to pre-flood levels. It’s also in the process of opening two retail shops. To keep up with demand, the company recently hired eight new employees and is planning to add 10 more positions to the payroll.

Expanding Reach

In the three years since Bosnia and Herzegovina’s new insolvency law took effect, it has facilitated the resolution of nearly 150 bankruptcy cases—four times the number of cases resolved in the same period of time before the new law was adopted. These resolved insolvency cases have returned $5.8 million to creditors. Each resolved case contributes to local stability.Since the adoption of the law, for example, more than 570 job positions have been preserved because of successful restructuring proceedings.

The insolvency law is part of a larger effort to improve debt resolution in Bosnia and Herzegovina and the wider Western Balkans. The initiative has received financial support from the Government of Switzerland's State Secretariat for Economic Affairs (SECO). The establishment of a good business-enabling environment and the increase in employment are important areas of SECO's program in the country.

Image: IFC helped Republika Srpska adopt the new law, which shortened the bankruptcy process to less than a year.

As for Pingvin—which is approaching its 30th birthday—the years since the new insolvency law went into effect have been just as sweet as the company’s confections.

Grebenar will continue to expand the business, aiming to provide even greater economic opportunities for women in Banja Luka, the city where the company is based. "Many women had been through hard times for just being a woman,” she says. It’s her goal to offer these employees a better life. "I hope Pingvin will be a company for which everyone will be able to say: ‘That is Pingvin, that is my home’.”

Join the conversation: #IFCimpact

Published in February 2019