March the 21st, 2023 - Is it all over for the enfeebled Split shipyard Brodosplit? After struggling for a considerable amount of time now, Fina is proposing Brodosplit bankruptcy proceedings owing to a debt of over 20 million euros.

As Poslovni Dnevnik writes, the Financial Agency (FINA) has officially submitted a proposal to the Commercial Court in Split to open Brodosplit bankruptcy proceedings, stating that the company has unpaid bases for payment of a massive 23.8 million euros.

According to FINA's information, as of March the 9th, 2023, the debtor has had unexecuted payment bases for a continuous period of 120 days, in the total amount of 23,828,527.04 euros, recorded in the Register of the Order of Payment Basis.

When we look at the data on the number of Brodosplit employees submitted to the Financial Agency by the Croatian Institute for Pension Insurance, the debtor has 99 employees. This could be seen in FINA's proposal which was published last week on the e-bulletin of the courts. FIBA as such submitted a new proposal to launch Brodosplit bankruptcy proceedings, and this proposal arrived at the Split Commercial Court on March the 10th. It was also published on the eOglasna panel. A hearing has been announced for March the 24th to comment on the proposal to open bankruptcy proceedings against the Split shipyard.

This followed after the High Commercial Court (VTS) rejected the appeal of the owner of Brodosplit, Tomislav Debeljak, against the decision of the Split Court to initiate a new pre-bankruptcy procedure. VTS granted the right to judge Ivan Culic to continue ex officio proceedings after the suspension of the pre-bankruptcy settlement proceedings as if a proposal to open Brodosplit bankruptcy had been submitted.

VTS believes that bankruptcy can only be prevented now with the offer of evidence of liquidity and the full payment of Brodosplit's obligations to its creditors. At the Commercial Court in Split, these cases are classified by automatic allocation, and as such, this new proposal was assigned to Judge Ana Golub Gruic.

Given that a hearing for Brodosplit is scheduled for March the 24th, 2023, at the Commercial Court, it is most likely that the new proposal for Brodosplit bankruptcy proceedings that has just arrived will be added to the existing one overseen by Judge Ivan Culic, given that it isn't possible to decide on two proposals.

For more, check out our business section.

February the 21st, 2023 - Can the constantly troubled Split shipyard Brodosplit be saved from its apparent destiny of bankruptcy? The company has been engulfed in turbulent times for a considerable amount of time now, as has the entire Croatian shipbuilding industry.

As Suzana Varosanec/Poslovni Dnevnik writes, for Brodogradjevna industrija Split (Brodosplit), which, through its daughter company is currently participating in the largest military technology fair in Abu Dhabi, "D-Day" is marked out on the calendar as March the 24th, 2023. This is the looming day on which the Commercial Court in Split will finally convene a decisive hearing on the matter of bankruptcy.

Along with the statement on the proposal to open bankruptcy proceedings against this debtor, the question of whether all of the proper prerequisites for bankruptcy are there will also be discussed.

On the part of Brodosplit, legal representatives Tomislav Debeljak and Tomislav Corak have been invited, meaning that the future of a company that has been struggling to keep its head above water for a while now will soon finally be clarified. As far as the blockade is concerned, in mid-February, the massive sum amounted to around 23 million euros, so as the last olive branch of salvation for Brodosplit, hopes are currently being placed in an American hedge fund that allegedly visited the shipyard several times in the past.

The fund is familiar with Brodosplit's overall capacities, claim the insiders, but the decision of the fund managers, more specifically whether they are ready to lend money to the Split shipyard or not, remains completely unknown as yet.

According to the bill of costs that is burdening the company, there is a loan worth about 100 million euros which would remove Brodosplit's blockade, pay off the debts to its creditors and finish numerous already started projects. It would also close the loan owed to a Russian creditor in the total amount of about 57 million euros. The owner has assured that the operation will take place by the said hearing, and the only other option for Brodosplit is unfortunately bankruptcy.

The aforementioned hearing was convened after the appeals court rejected Brodosplit's appeal as unfounded, while at the same time confirming the decision of the first-instance court from back in November 2022.

This is otherwise a decision that rejected the debtor's withdrawal of the proposal for opening pre-bankruptcy proceedings as untimely, while the debtor's withdrawal of the proposal for opening bankruptcy was rejected as inadmissible.

For more, make sure to check out our dedicated business section.

November the 15th, 2022 - Brodosplit has built yet another large and valuable structure for a well known company, this time an innovative buoy for the collection of data out at sea.

As Poslovni Dnevnik/Suzana Varosanec writes, OCG-Data, an innovative buoy for collecting/recording biodiversity and metocean data, was successfully launched in the port of the Split's shipyard. It was built for the client Ocergie, the French branch of the American company Ocergy, Brodosplit announced. As they stated, with this project, the Split-based company is proving its capabilities on the wind offshore market, and it is realistic to expect the signing of new contracts for the construction of more new similar buoys and floating platforms soon, which implies the delivery of structures with an annual steel consumption of more than 100,000 tonnes in the period up to the year 2030.

The American Ocergy is otherwise a relatively young company, but according to its CEO Dominique Roddier, it wants to become one of the leaders in the field of offshore solutions for offshore wind farms (Floating Wind Foundation Design), which is "the result of the progress they have made over the last few years".

“This new innovative data collection buoy will gather information that will be used to better understand everything from wind turbulence to air and marine life around the project site. The pilot unit, part of Ocergie's ''Blue Oracle'' project (buoys with Lidar-optical radar and underwater equipment to assess ocean resources and characterise life in the environment) has received approval from the French authorities to be deployed at a site where several of the first floating wind power plants in the French region of Occitanie will be situated,'' they stated from Brodosplit.

The project itself is also supported by ADEME within the Investment Programme for the Future, and according to Roddier, this innovative buoy is important in multiple ways, both as an integral part of their wider business plan and as the first step in the development of the ''OCG-Wind FOW'' platform.

"We have an increasing number of pre-commercial projects before the year 2030, until the offshore wind industry implements large GW commercial FOW (Floating offshore wind) projects worldwide," said Roddier. The innovative marine data collection buoy made by Brodosplit will be deployed near one of the windy ''macro-zones'' in the Mediterranean Sea off the coast of southern France.

"Despite the financial problems you've been facing at Brodosplit, we are extremely grateful for the full engagement of your team and employees, and very satisfied with the excellent work that Brodosplit has done in creating our platform. While you're discussing different business projects with investors, I believe that companies like Brodosplit can play a significant role in the energy transition and become a strong driver of the commercial development of the FOW industry, not only for projects here in the Mediterranean but throughout Europe," emphasised Roddier.

For more, make sure to check out our dedicated business section.

October the 2nd, 2022 - The Croatian shipbuilding yard Brodosplit keeps ending up in the news for all the wrong reasons as shipbuilding in this country continues to suffer, but some positive news comes in the form of it now being engaged in constructing a wind power testing platform for a French client.

As Morski writes, this innovative data collection unit being built by Brodosplit for the French will collect information that will be used to better understand everything from wind turbulence to air and marine life at the project site. The project regards the building of a platform for collecting marine data on one of the floating "macrozones", which is being installed in the Mediterranean Sea near the coast of France.

The technology operator is Ocergy, and this pilot unit is part of their wider ''Blue Oracle'' project. A platform with both lidar and subsea equipment to assess marine resources and characterise how things are within that environment at a given time has been approved by the French Minister of Maritime Affairs, and the structure will be deployed just outside the French region of Occitania, the southernmost region of metropolitan France, excluding Corsica.

Christian Cermelli, president of Ocergy SAS, the Ocergy subsidiary that runs ''Blue Oracle'', told Recharge:

''Soon, when the second phase of the project begins, the OCG-Data buoy will collect high-resolution metocean and biodiversity data Most of the main suppliers of the Blue Oracle project have been selected, including Brodosplit for the construction of the buoy, Euroports, for the assembly of the buoy and the shore base in Port-la-Nouvelle, and Vryhof for the anchor and mooring. The unit will be equipped with a Vaisala wind deflector lidar.

Other companies involved in the project include: Tachyssema Developpement, which is supplying the energy management system, Scada and onboard instrumentation; The University of Perpignan CREM – UPVD, which oversees marine biodiversity studies, and Sense of life, which will deal with the monitoring and analysis of seabirds.

For more, make sure to check out our dedicated Made in Croatia section.

August the 19th, 2022 - The Brodosplit shipyard is continuing to face significant problems, but it seems that a saviour has come at the last moment in the form of a contract between the famous Dalmatian shipyard and the American Storylines company. Debeljak's troubled company will build the massive vessel, the estimated retail sales value of which stands at US $1.5B

As Poslovni Dnevnik/Marija Brnic writes, Brodosplit is currently suffering the fate of both the Uljanik and 3 Maj shipyards in the form of attracting negative attention with press reports about the pre-bankruptcy process of its companies. Despite the fact that Brodosplit's employees had been sent home, it seems the company will now be able to breathe a sigh of relief.

The story that Brodosplit could participate in the construction of the first so-called residential cruise ship with 547 apartments is the absolute last thing anyone could have ever possibly expected in the current uncertain situation. It seems suspicious that the Americans would sign a contract to build a ship of that size and cost. While many raise their eyebrows in disbelief, it has come to light that this fantastic piece of news is indeed true. According to the press release provided by Storylines from Miami, the contract with Brodosplit has already been signed.

Brodosplit will build a 232.5-metre-long Narrative ship in the City of Split, which, according to the press release, will be the first fully ecologically sustainable ship, and should be delivered in 2025.

"We're delighted to be partnering with such a respected European shipyard that has a long history of building high-quality passenger ships," said Storylines CEO Alister Punton. According to him, the ship will provide its residents with the comfort of home. It differs from other cruisers in that it is intended for the complete life of residents at sea. It will also boast a post office, a school, a library, a hospital, a bank, swimming pools, business premises and about 20 different catering facilities. It will also be the largest wellness centre at sea in the world with its own gardens, farms and space for several types of sports and recreation on board.

For more than understandable reasons, Brodosplit has been very brief in its communication about the construction of the ship. Everything, they say, was said in the Storylines press release, which also includes Tomislav Debeljak's statement.

"We always enter into projects that bring about the development of the industry and the inclusion of new technologies. This ship is energy efficient, with two types of propulsion (diesel and liquefied gas) and will be optimised for the lowest possible emission of greenhouse gases," Debeljak said in his statement.

Their American partner, therefore, still believes that Brodosplit is a good choice for a partnership, and the second question to now keep in mind is how the Croatian Government will behave, given that Brodosplit needs an advance guarantee to get things moving.

For more, make sure to check out Made in Croatia.

ZAGREB, 20 May 2022 - Pre-bankruptcy proceedings have been launched for the Brodosplit shipbuilding company, the Split-based dock confirmed to Hina on Friday.

The application for the pre-bankruptcy procedure submitted by Brodosplit itself was received by Split Commercial Court on 27 April.

According to Brodosplit's management, the company found itself in trouble financially because it could not withdraw in full two loans from the Russian VTB bank after it came under Western sanctions due to Russia's invasion of Ukraine. The loans were to be spent for the completion of two vessels and other expenses.

Pre-bankruptcy proceedings have also been proposed for Brodosplit's owner, the DIV group because it owed HRK 41.69 million as of mid-April.

During March and April, Split Commercial Court held hearings regarding 11 companies within the Split Shipbuilding Industry. 

The court has received dozens of proposals for bankruptcy proceedings against companies connected with the Split Shipbuilding Industry.

Proceedings have been launched to examine conditions for opening possible bankruptcy proceedings in another 25 companies in the group.

For more, check out our politics section.

ZAGREB, 7 May 2022 - Finance Minister Zdravko Marić on Saturday denied Brodosplit CEO Tomislav Debeljak's statement that a solution had been found for the shipyard, saying talks are under way and that the situation is very complex.

"Unfortunately... no agreement has been reached," Marić told the press.

He said the Brodosplit situation became even more complex in the past few weeks due to the opening of pre-bankruptcy proceedings. They imply an additional procedural as well as "temporal component" regarding the approval and regime of state aid, he added.

Also, he said, the Finance Ministry has been analysing the technical, legal and financial justification of a protested guarantee request.

Our talks and cooperation with the HBOR (Croatian Bank for Reconstruction and Development) are in line with that, Marić said, regretting that "such conclusions have been made" based on "certain talks, questions asked and answers given."

He would not say if the situation was closer or farther from an agreement being reached, saying it is still not clear if the business model in question is viable.

Marić said the HBOR had a very responsible approach to its job  and that he was sorry it was exposed to "such pressure" only for showing good will.

Earlier today, Debeljak told N1 television that a meeting was held at the HBOR two days ago, that a solution had been found and that Brodosplit's problem would be solved in three months.

Late in March, the shipyard said €60 million from loans given by the Russian-owned VTB Europe bank it was using to finance the building of two ships had been blocked. The bank is subject to restrictions due to Russia's invasion of Ukraine.

Brodosplit asked the government to support a proposal that the loans be rescheduled with HBOR funds. One loan would be repaid by the end of the year and the other over a longer period of time, which would allow the shipyard to operate normally.

Earlier this week, Debeljak filed a second pre-bankruptcy motion for Brodosplit after the first one was dismissed due to procedural error.

According to unofficial reports, HBOR is willing to lend the money to Brodosplit pending a government decision.

For more, check out our business section.

April the 11th, 2022 - The well known Croatian shipyard Brodosplit should be responsible for the construction of a massive luxury vessel which would boast apartments on board and be worth half a billion euros.

As Morski writes, imagine living in an apartment aboard a luxury ship and sailing the world's seas and oceans. It sounds like a futuristic scenario or like something out of a film, but it is a reality and it should start taking shape this year - and right here on Croatian soil. The British company Storylines plans to build a residential ship worth more than half a billion euros, and it will be built by Croatian hands at Brodosplit.

The construction of the Narrative - one of the most luxurious residential ships in the entire world - should start right here in the Republic of Croatia this year, with 547 residences ranging from one to four bedrooms. The most expensive boat apartment will cost 7.1 million euros, and the apartments will be rented out - for about 350 thousand euros for a period of 12 or 24 months, writes Skveranka.

The Storylines company behind the ship says the ship that Brodosplit will be in charge of building will have 20 restaurants and bars, three swimming pools, an art studio, a bowling alley and a pet/animal exercise area, and fitness enthusiasts will have a running track, a gym and a yoga studio at their disposal, as well as golf simulators.

The most innovative aspect of the design is the water-level marina deck where passengers will be able to use jet skis or kayaks, or simply dive down into the sea below when the gigantic vessel is moored.

The ship is currently in the design and engineering phase

It will be, as they pointed out from Storylines, the most luxurious residential ship that will enables the citizen of the world to live a healthy and active life full of freedom and adventure, all while maintaining their work and family life. A life in which they can enjoy unique, unforgettable life-changing experiences as they travel the world from the comfort of their homes.

Narrative is expected to sail the world every 1,000 days, stopping for a few nights in most ports. Residents will be able to come and go as they please, invite friends on board to stay or rent their apartments when they are not at sea.

Storylines points out that Narrative, which will operate on cleaner liquefied natural gas, is now in the design and engineering phase, and that the first steel should be cut later this year at the Brodosplit shipyard.

''We're excited to work together with the Croatian shipyard Brodosplit in Split on our first private residential ship which will be called MV Narrative. It was important for us to build a ship here in Europe and we're delighted with the partnership with Brodosplit on the project,'' said Storylines co-founder Shannon Lee.

For more, check out Made in Croatia.

ZAGREB, 1 April (2022) - Economy Minister Tomislav Ćorić said on Friday that the government and the Croatian Bank for Reconstruction and Development are always ready to cooperate with shipyards, but "the current problems at Brodosplit are somewhat more complex" than what has been presented in the public.

Addressing the press after a conference on the National Recovery and Resilience Plan (NPOO), Ćorić said that Brodosplit had undergone successful restructuring, which had cost the state budget HRK 1.5 billion.

The minister also explained that the DIV Group, of which Brodosplit is a member, had taken the positive course, however, the progress was overshadowed by the corona crisis and the repercussions of Russia's military aggression against Ukraine.

"The issue of shipbuilding in Split is not simple and should considered from several points of view," says Ćorić, adding that he is nevertheless optimistic that Croatia's shipbuilding industry stands good chances.

The president of the management board of the DIV Group and the Brodosplit shipyard said on Thursday the company was suspending production because €60 million of its funds were currently blocked. Speaking to Hina, Tomislav Debeljak said Brodosplit was financing the building of two ships with funds from VTB Europe, a Russian-owned bank subject to considerable restrictions due to the war in Ukraine.

"The situation we are in is extremely dramatic because VTB has stopped further loan payments because of the war in Ukraine, which has blocked us," Debeljak said, noting that €60 million of the company's funds were "trapped" in those projects.

A member of the DIV Group Management Board, Darko Pappo, said today at the conference which was attended by Ćorić that that DIV was very much affected by the current situation because two major projects were financed by the Russian-owned bank, with EU sanctions against Russia having prevented the completion of the projects and their refinancing.

"We are talking about two loans amounting to €90 million, with our share totalling around €60 million. That is a huge amount of money and this has made us suspend production," Pappo said.

He added that he expected the government to make decisions fast to help the shipbuilding group overcome the situation. The executive also said that there were end-buyers for both projects, contracts on long-term lease and a repayment schedule, and that, even though state aid is not necessary, the situation requires a prompt government reaction.

The government should support DIV's proposal for the loans to be refinanced with HBOR (Croatian Bank for Reconstruction and Development) funding under commercial terms, and one of the loans should be fully repaid by the end of the year while the other would be repaid over a longer period of time, said Pappo.

"That would ensure the continuation of production and normal functioning," he said, adding that both the Brodosplit shipyard and DIV Group operate in the black and employ a large number of workers, which is why they believe the government and HBOR should step in.

Pappo recalled that the recent case of Sberbank showed that a prompt reaction by the government was possible.

For more, check out our politics section.

ZAGREB, 1 April (2022) - Economy and Sustainable Development Minister Tomislav Ćorić said on Friday he believed the year 2022 would see a further growth of the national economy.

"I believe that the Croatian economy will show in 2022, just as it did in 2021, the kind of resilience that opened the door to convergence towards the EU average," Ćorić said at a meeting of exporters, organised by Lider business weekly.

Recalling Croatia's growth rate of more than 10% in 2021, the minister said that this year could be like that as well. "That is our goal and I believe that with good exporters, we can make it happen," he said.

Croatian exporters share the fate of all European exporters who are in any way connected with the Russian Federation, while the situation is somewhat easier for exporters with diversified portfolios, whose business is not predominantly oriented to Russia, he said.

Croatia does not have too many companies that are exposed to the Russian market, he said, adding that the current situation could be overcome by companies expanding their market to other European countries, while the government would help by facilitating competition, primarily by enabling greater energy efficiency and lower production costs.

Ćorić announced a HRK 1.9 billion tender to be published by the end of Q2 referring to energy efficiency, which should help the manufacturing industry increase its capacity.

Some of the exporters have liquidity problems due to a decline in business in the Russian Federation, he said, noting that the Croatian Bank for Reconstruction and Development (HBOR) would step in.

DIV Group: Situation requires rapid response

Answering questions from the press, a member of the DIV Group Management Board, Darko Pappo, said that DIV was very much affected by the current situation because two major projects were financed by a Russian-owned bank, with EU sanctions against Russia having prevented the completion of the projects and their refinancing.

"We are talking about two loans amounting to €90 million, with our share totalling around €60 million. That is a huge amount of money and this has made us suspend production," he said, adding that he expected the government to make decisions fast to help the shipbuilding group overcome the situation.

He added that there were end-buyers for both projects, contracts on long-term lease and a repayment schedule, and that, even though state aid is not necessary, the situation requires a prompt government reaction.

The government should support DIV's proposal for the loans to be refinanced with HBOR funding under commercial terms, and one of the loans should be fully repaid by the end of the year while the other would be repaid over a longer period of time, he said.

"That would ensure the continuation of production and normal functioning," he said, adding that both the Brodosplit shipyard and DIV Group operate in the black and employ a large number of workers, which is why they believe the government and HBOR should step in.

Pappo recalled that the recent case of Sberbank showed that a prompt reaction by the government was possible.

AD Plastik focusing on new deals 

Marinko Došen, Management Board chair of plastic car parts manufacturer AD Plastik, said the revenue from the Russian market accounted for 20-25% of total revenue and that the company's two factories in Russia were currently not operating and there was no information on when they could resume operation.

AD Plastik is an export-oriented company, focusing on new deals and expanding to markets where it will be able to operate, Došen said.

As for the rise in energy costs, he said that the cost of energy products had gone up significantly for all businesses and that state aid would be welcome as it would also help them cover the cost of labour for markets that were currently inaccessible.

For more, check out our business section.