Croatian government fails to decide on €930mn Uljanik restructuring

Croatian government fails to decide on €930mn Uljanik restructuring
By Carmen Simion in Bucharest March 20, 2019

Members of Croatia's ruling coalition failed to decide on March 20 if troubled shipbuilding group Uljanik should undergo restructuring or file for bankruptcy, the head of the parliamentary group of the Croatian Democratic Union (HDZ), Branko Bacic, said, according to Hina news agency. A decision should be made within a few days.

Uljanik, which owns the Uljanik shipyard in Pula and the 3. Maj shipyard in Rijeka, is in severe financial difficulties. The shipbuilder has already lost several vessel construction deals and has seen its bank accounts frozen several times, while its employees went on strike due to unpaid wages.

Economy Minister Darko Horvat said on March 20 that in the short term the bankruptcy would be a cheaper solution than the restructuring. “But in the long run, in the following ten years, it is a matter of controversy,” Horvat said, according to Total Croatia News.

The economy minister estimated that the restructuring of Uljanik would cost €930mn.

“There are only two options, we will either opt for restructuring and finance this interim phase with a loan that won’t burden the state budget or the strategic partner’s liquidity, or we will opt for bankruptcy,” Horvat said earlier in March, according to Total Croatia News. He added that the strategic partner has “good intentions to participate in creating a better and sustainable Uljanik with his resources of more than €35mn.” 

In January, Croatian shipyard Brodosplit submitted 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 the bankruptcy proceedings.