ZAGREB, July 24, 2019 - The president of the Supervisory Board of the Rijeka-based 3. Maj shipyard, Juraj Šoljić, on Wednesday sent a letter to Prime Minister Andrej Plenković, asking him that, based on everything that has been done in the dock in the past two months, he present his stance and make a decision on the fate of that shipyard.

"Our aim is to finish the ships we have started and to avoid bankruptcy because 3. Maj and Croatia will benefit the most if production continues. Hence, we ask that you urgently make a decision so that extra costs are not incurred," Šoljić wrote.

He underscored that with the efforts invested by the dock's director, Edi Kučan, with the help of the Economy Ministry and judiciary as well as the Jadranbrod - Hrvatska Brodogradnja company, a lot has been done to bail out the shipyard.

He noted that dock's liabilities were reduced from 156 million kuna to 76 million kuna. Detailed calculations have been made that would be required for ships to be completed and talks have been conducted with potential buyers.

He added that over the past two months the dock had contracted and completed other jobs too which ensured some liquidity and made it possible for wages to be partially paid.

We are prepared to immediately start with production

Šoljić underscored that a new bankruptcy hearing was scheduled for August 1. "Based on everything we have achieved in the shipyard over the past two months, please inform us of your stance. If you decide for the continuation of production, we are prepared to immediately start with production, particularly with regard to the construction of a ship for the transport of trucks and vehicles for which material exists but, considering that not one contract is valid, we cannot launch construction," he underlined.

Šoljić warned that as more time goes by, the more costs are incurred and that could result in certain creditors once again demanding distress orders which could then jeopardise deadlines and, in that case, prices offered to buyers would be completely different.

More news about Croatian shipbuilding can be found in the Business section.

ZAGREB, July 4, 2019 - A hearing to determine whether conditions exist to launch bankruptcy proceedings for the Rijeka-based 3. Maj shipyard, scheduled for Thursday at Rijeka Commercial Court, was once again delayed, this time until August 1, as it was expected that more creditors would lift their blockade of the shipyard's account.

Judge Liljana Ugrin said that the situation in the shipyard was rapidly changing and that according to the Fina financial agency the dock's debt has risen to 96.6 million kuna, 29.7 million of which refers to workers' wages.

In the meantime, she has received information that one of the shipyard's creditors has withdrawn its enforcement order for 10 million kuna, as a result of which the shipyard's account was now blocked for 86 millionkuna , adding that there are indications that some other creditors may also withdraw their enforcement orders.

Citing data from Fina, the judge said that on June 28 the claims amounted to HRK 156 million, adding that the national electricity provider HEP was still demanding HRK 10.3 million, but noted that workers' wages were not part of the negotiations.

Ugrin said that 200,000 kuna had been deposited in the shipyard's account last week and this was immediately transferred for workers' wages.

The judge said that if she knew that wages would be paid immediately she would launch bankruptcy proceedings, underscoring that she was interested in solutions, that this was not just about the 800 employees at the dock and that she was interested in saving part of the city's industry.

The shipyard's director Edi Kučan said that it was important to regain the trust of creditors, that there were indications that other creditors too would withdraw their claims, and that the claims could eventually be reduced to about 1 million kuna.

More news about Croatian shipbuilding industry can be found in the Business section.

ZAGREB, June 27, 2019 - Minister of Economy, Entrepreneurship and Crafts Darko Horvat said on Thursday he believed that Rijeka's 3. Maj shipyard would not end up in bankruptcy and that the government intended to find a solution to help the shipyard complete the projects it had begun.

"We have to be sure that whatever we do is in line with law," Horvat told reporters after a cabinet meeting when asked if the government would provide financial assistance for the completion of the vessels.

Asked if he expected this might draw objections from the European Commission, Horvat said there would be no problems with the Commission. Asked if this meant that the shipyard would not end up in bankruptcy, given that a bankruptcy hearing was scheduled for July 4 before the Commercial Court in Rijeka, Horvat said he believed there would be no bankruptcy.

Asked last week if there was a chance of the government entering 3. Maj with its own money, Horvat said that a legal way was being sought to ensure the completion and delivery of the ships that were near completion.

On July 4, the Commercial Court in Rijeka is due to examine preconditions for the opening of bankruptcy proceedings for the 3. Maj shipyard. The hearing has been delayed several times so far, the last time being in early June.

More news about Croatian shipyards can be found in the Business section.

ZAGREB, June 12, 2019 - Economy Minister Darko Horvat said on Wednesday the 3. Maj shipyard had a future and reiterated that Chinese investors were interested in the Brodarski shipbuilding institute.

Asked on Croatian Radio if 3. Maj could be salvaged, he said that legally, the biggest problem for the government was that the shipyard in Rijeka was part of the Uljanik shipbuilding group's bankruptcy estate.

Horvat said bankruptcy was the last thing he wanted for 3. Maj. He said that if the government invested in the completion of four ships now in the dock, it wanted guarantees that, once they were finished, the money would be returned into the state budget.

Such a model of state aid should work also for the building of future ships, he added.

Horvat said no state guarantee had been enforced in 3. Maj over an undelivered ship and that all talks about the shipyard would end if and when a guarantee was enforced.

He went on to say that Chinese investors wanted to revamp seven of Brodarski Institut's 15 labs, but that he still had not received their response about potentially entering 3. Maj or Uljanik.

He said it was very likely that Belgium's Jan De Nul company would buy a dredger for which the state recently paid 130 million euro in guarantees, so that between 100-115 million euro will be returned into the state budget.

The minister also announced the further reduction of administrative barriers to doing business and investments.

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ZAGREB, May 22, 2019 - After holding talks in Zagreb on Tuesday evening with a delegation of the China Shipbuilding Industry Corporation (CSIC), which on Monday visited Zagreb's Brodarski Institut shipbuilding institute and on Tuesday the Rijeka-based 3. Maj shipyard, Croatian Economy Minister Darko Horvat said that there was potential for cooperation with the Chinese partners.

Addressing the press after the talks, the Croatian minister said that the 14-engineer expert delegation had toured the Zagreb-based institute and the Rijeka shipyard and that they were now going to submit a report to the company's management.

It remains to be seen which decision the management will make, Horvat said, expressing confidence that the Chinese side would soon inform Croatia of its decision, be it positive or negative.

The Chinese delegation on Monday visited all the 14 laboratories of the Zagreb-based institute and there are currently good indications of possible cooperation in some concrete projects, the minister said. "A step forward has been made toward potential future cooperation."

He added that it seemed to him that the Chinese side is ready to for a joint venture with Brodarski Institut.

When asked by the press what the Uljanik shipyard in Pula could expect, the minister admitted that the talks had focused mainly on shipbuilding in China and shipbuilding in Rijeka.

The Chinese delegation has shown satisfaction with the fact that a segment of the Rijeka-based dock has been upgraded and offers possibilities of cooperation, according to him.

He admitted that there were still no strict deadlines for any future steps.

He also made it clear that the government did not expect the Chinese side to be a strategic partner that would pay off the shipyards' debts from the past.

In the meantime, the Pula-based Uljanik shipyard on Tuesday reported on the Zagreb Stock Exchange that due to bankruptcy proceedings being launched in Uljanik d.d. and, hence, the inability to deliver a Ro-Ro ship to the CLdN shipping company, the client has cancelled the contract.

Late in January, the same client cancelled a contract for the construction of another Ro-Ro ship because Uljanik was not in a position to deliver the ship.

Uljanik closed the deal for the construction of 2+2+2 ships for the Luxembourg client in March 2016.

The Commercial Court in Pazin decided on May 17 to open bankruptcy proceedings in the Uljanik shipbuilding group's umbrella company, Uljanik d.d.

More news about the shipbuilding industry can be found in the Business section.

ZAGREB, April 22, 2019 - Istrian Democratic Party (IDS) leader on Sunday reacted to the Easter homily delivered by the Archbishop of Zagreb, saying that Cardinal Josip Bozanić had used the Easter holiday to issue "biased political messages" and calling on him to "refrain from political cheering" and to intercede for the workers at the Uljanik and 3. Maj shipyards.

In a statement, IDS president Boris Miletić expressed regret that Cardinal Bozanić had used Easter to issue "biased political messages and a cynical criticism of Istria County and Primorje-Gorski Kotar County, which he said represent 'the most developed parts of the country'."

"Instead of engaging in political campaigning, Cardinal Bozanić could have used his speech today to draw attention to the inhumane, callous and un-Christian policy of stalling which the government has persistently used against the Uljanik and 3. Maj workers," the IDS leader said in the statement.

He appealed to the Church authorities "to refrain from political cheering and discriminating against the two regions which they do not like for reasons best known to them, and to actively intercede for the shipyard workers and help end their months-long suffering."

In his homily, Cardinal Bozanić referred to the shipyard workers in Pula and Rijeka who "have been coming to work for months without being paid," noting that this was happening in a part of the country that was described as most developed.

"How is this possible? Politicians, both local and those at the highest level, are certainly aware of this. Problems that have been long kept under the carpet in the interest of power-wielders need to be dealt with, but it is the little man that gets hurt in such games and calculations," Bozanić said, urging those in charge not to lose sight of the unprotected little man in addressing difficult issues.

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ZAGREB, January 16, 2019 - Economy Minister Darko Horvat during Question Time in Parliament on Wednesday dismissed criticism by MP Tulio Demetlika of the Istrian Democratic Party (IDS), who said that Horvat lied that he had a strategic partner for Croatian shipyards, stressing that he was speaking about potential partners with whom talks were underway.

"I have never said we had a strategic partner for Croatian shipyards, I said we have potential partners with whom we are talking," Horvat told Demetlika, who also asked Horvat why he asked local government units to break the law and pay salaries to Uljanik workers.

"Why don't you say it clearly? Do you or do you not have a strategic partner for Uljanik," Demetlika said, warning that uncertainty continues for the workers of Uljanik and 3. Maj shipyards, which lost more than 1,300 workers in less than a year.

The minister responded that if one were to calculate the amounts the government had injected into the docks in Rijeka and Pula in 2018, as assistance to workers, they would arrive at nearly one billion kuna. "You tell me, where is the local government in all of this? And take into account that the local government created the management in the two docks," the minister said.

Dissatisfied with the "unclear position" of the government regarding the survival of the shipbuilding industry, Demetlika insisted that the government is the only one that can do something.

More news on the Croatian shipyards  can be found in the Business section.

ZAGREB, January 4, 2019 - The Rijeka-based Commercial Court on Friday launched procedure to establish the prerequisites for the approval of official receivership for 3.Maj Rijeka shipyard and appointed Zdravko Čupković temporary official receiver.

The next hearing at which a final decision on official receivership will be made is set for 6 February.

A week ago, the Financial Agency submitted a request with the local commercial court for official receivership proceedings for the 3.Maj dock, which is part of the ailing Uljanik Group.

The request was submitted after the dock's account was blocked for 120 days due to overdue liabilities higher than 72 million kuna.

Local unionists have informed the public that 3.Maj shipyard owes about 150 million kuna to suppliers and subcontractors, whereas the Uljanik Gorup is supposed to pay back to the Rijeka shipyard 600 million kuna of the loan 3.Maj gave to the Pula-based group. The sum includes also interest rate.

This past Monday, 3. Maj shareholders held an extraordinary meeting to amend the company's rule book whereby a possibility of appointing up to five members of the management board was reintroduced.

In late December, the supervisory board of the Uljanik shipyard decided to terminate the strategic partnership with the Kermas Energija company of businessman Danko Končar and to seek another partner who will be willing to invest in the group's restructuring.

Uljanik invited all interested investors to express their interest in a strategic partnership and recapitalisation in accordance with decisions reached at shareholders' meetings of February 16 and October 16 this year. A data room is being opened for all prospective strategic partners.

More news on Croatia’s troubled shipbuilding industry can be found in our Business section.