The news was announced by Economy Minister Stanko Stepišnik on the sidelines of a forum organised by the business daily Finance in Ljubljana on Thursday. He said Svea would get the aid in two instalments of EUR 1.4m each.

Noting that the final decision on the aid would be taken next week, the minister said he expected the company's management to focus on the market, to get new buyers and in this way secure new jobs.

Svea boss Sonja Klopčič was unavailable for comment, but unofficial information is that the company will use the state money to pay out two months' back wages to workers and the rest as working capital.

The company currently has EUR 900,000 worth of orders open that it has not been able to complete because of the lack of cash.

Svea shareholders endorsed a EUR 2.1m capital injection from Turkish Diga Companies Group in March, but the selected strategic partner failed to supply the money.

Svea, which employs 180 people at the core company and its subsidiaries, contributed over EUR 1.4m into the state budget in the form of taxes last year.

Its boss says it is one of few bigger furniture companies in Slovenia that has an established trade mark and marketing channels in 25 markets.

Svea ended 2011, the latest year for which data are available, with a net loss of EUR 2.5m on sales of EUR 12.5m.