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Southeast Europe
March 29, 2019 www.intellinews.com I Page 15
Croatian government won't endorse Uljanik’s restructuring
Carmen Simion in Bucharest
The Croatian government cannot endorse the restructuring of troubled shipyard Uljanik, Prime Minister Andrej Plenkovic said on March 28.
Uljanik, which owns the Uljanik shipyard in Pula and the 3. Maj shipyard in Rijeka, is in severe financial difficulties. The shipbuilder has lost several vessel construction deals and has seen its bank accounts frozen several times, while its employees went on strike due to unpaid wages.
Plenkovic said that the cost of the restructuring plan proposed by Uljanik’s strategic partner is between HRK7.5bn and HRK10.8bn (€1bn-1.5bn).
This is higher than the figure mentioned by Econ- omy Minister Darko Horvat on March 20, when
he estimated the restructuring cost of Uljanik at €930mn, saying that in the short term bankruptcy would be a cheaper solution than restructuring.
“The implementation of such a restructuring plan by the state would require large financial expo- sure and would be undoubtedly a burden on all Croatian citizens and taxpayers,” Plenkovic said, adding that the government is seeking additional solutions for the shipyards.
The Croatian PM said that between 1992 and 2017, the state spent HRK31.7bn on the recov- ery of Croatia’s shipyards. Out of the total sum, HRK13.3bn were directed to Uljanik Group.
In January, Croatian shipyard Brodosplit submit- ted in partnership with Italy’s Fincantieri Group an offer to become a strategic partner for Uljanik.
On March 5, the Croatian financial agency FINA asked the court to open bankruptcy proceedings against Uljanik for a debt of HRK28.2mn.
The court has appointed a temporary insolvency manager to analyse if there are prerequisites for opening bankruptcy proceedings.
Earlier this week, the Croatian police arrested 12 people as part of an investigation related to Ul- janik. The 12 individuals are suspected of having committed several offences of abuse of trust in economic activity and fraud. Local media reported that former president of the management board of Uljanik, Gianni Rossanda, and his predecessor Anton Brajkovic, were among those arrested.
Rating agency Fitch projected in December that the materialisation of contingent liabilities stemming from Uljanik could to amount to approximately 0.6% of GDP in 2018.
However, another fellow international rating agency S&P Global Ratings said earlier this month that the likelihood of fiscal slippages from payments of state guarantees against troubled Uljanik shipyard’s debt liabilities are reduced, while raising its long- and short-term foreign and local currency sovereign credit ratings on Croatia to 'BBB-/A-3' from 'BB+/B'. S&P previously warned that resolving the situation at Uljanik could cost Croatia 1% of GDP.
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