EC doubts Croatian Uljanik strategic partner’s financial ability

Economy minister Darko Horvat confirmed on Wednesday that the EC’s first comments on a restructuring program for the troubled Pula-based Uljanik shipyard had arrived and that the EC doubted the chosen potential strategic partner’s financial capability and warned about the state’s too big involvement. He explained that the comments arrived on Tuesday and were forwarded to the Uljanik management, the strategic partner Kermas Energija of Danko Koncar and the consultants, whose response is expected in the next few days. Horvat noted that the comments were identical to those of the economy and finance ministries to the first draft restructuring program three months ago. The latter raises the question why the government, that controls more than 25% in the company, has sent the draft program in the first place, thus losing three months of the shipyard, instead of returning the plan to the company and its consultants for being reworked. As we have argued before, the move of the government has showed its negligence to the problems in the dock.

Horvat also informed that with regard to state guarantees on Uljanik that are now due, the only bank which had enforced state collateral in the amount of EUR48m was Splitska Banka and that it was paid. He said that the Croatian Postal Bank (HPB) has not opted for that, adding that it is yet to be seen next week what will happen with the ships worth EUR70m whose construction has been cancelled. The government issued collateral for a EUR48m loan which HPB gave Uljanik in January. The minister also said that in order to reduce the potential costs from the state guarantees issued for Uljanik on the state budget, the government has been trying to assure the clients whose ships were at a high stage of completion either at Uljanik or the Rijeka-based 3.Maj dock to let them be completed. He assessed that if the government was successful, the pressure on the state budget will be halved, perhaps to about HRK 1bn. Recall that FinMin Zdravko Maric has admitted that Uljanik’s financial situation and potential activation of the issued for it state guarantees poses a big risk to the state budget in the short- to medium-term

As for the September wages in Uljanik, Horvat said that the collection of money for their payment has not started yet, but underlined that the management must provide the money for the wages of the workers and added that the payment of wages from the state budget is no longer possible as the EC does not allow it. The minister noted that which model the government will consider and perhaps have a chance to pay them, at least three minimum wages, will be known next week.

Earlier in the day Uljanik and 3.Maj docks informed in response to the Zagreb stock exchange inquiry that the restructuring model for Uljanik that has been analyzed by the EC referred only to that dock and not to the other companies in the group. They also said that the possible separation of 3.Maj in the long term organization strategy of the Uljanik group and the interest of certain investors have already been announced, but no procedures envisaged by law for separating the 3.Maj shipyard have been launched as yet. They also said that no formal step in that regard will be taken before the Uljanik restructuring program is adopted.

Share this post