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.

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

ZAGREB, June 10, 2019 - The keel of a groundbreaking polar expedition ship to be called the Ultramarine, which is being built for US client Quark Expeditions, was laid at Brodosplit shipyard on Monday.

The ship to be completed next year will be 128 meters long, with a beam of 21.5 meters, it will weigh 13,500 gross tons and have two helidecks and 20 fast life boats. Four electric and diesel engines will enable it to sail at 16 knots.

The ship will combine state-of-the-art technology and cutting-edge safety features that will enable passengers to disembark more quickly and go deeper into the polar wilderness.

"This is a new business success for Brodosplit and a positive step forward on the market. This will be a beautiful ship that will accommodate 196 passengers who will be cared for by a 113-crew. With such ships, Brodosplit is definitely competing with the world market," said the dock's spokesman, Josip Jurišić.

He added that Brodosplit was operating in the black and its order books were full until 2022.

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

ZAGREB, June 3 (Hina) - Economy Minister Darko Horvat said on Monday that the position of the China Shipbuilding Industry Corporation (CSIC) on possible cooperation with the Croatian shipyards was still not known, announcing a meeting with businessman Danko Končar over a proposal regarding Uljanik.

Answering a reporter's question, Horvat said that at the moment there was still no concrete answer from the Chinese company, whose delegations recently visited the ailing Uljanik and 3. Maj shipyards, and that he expected a letter with a concrete offer or analysis, after which he would inform the public of it.

Asked if he had information that Končar, who was formerly considered a potential strategic partner in Uljanik's restructuring, could return to hire Uljanik's workers and rent its equipment for a ship for a Kuwaiti client, Horvat said that he had heard of that information and that Končar had asked for a meeting with him, which would be held next week. "At the moment, I cannot say what kind of a proposal or idea Mr Končar has," said Horvat.

Asked to comment on the fact that State Assets Minister Goran Marić was increasing the rent for state-owned premises used by small business owners, Horvat said that he had been in touch with Marić and that next week a meeting would be held involving officials of the Croatian Chamber of Trades and Crafts, after which a joint statement would be issued.

Asked if taxes for small business owners would continue to be reduced, Horvat recalled that work on an action plan for the cancellation and reduction of so-called non-tax levies was in its final stage and that the plan would be presented to the public in the next 30 days or so.

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

ZAGREB, June 2, 2019 - Economy Minister Darko Horvat said on Saturday he would be happier if he could have utilised the 4.4 billion kuna in enforced guarantees for ships for good entrepreneurs instead.

He was responding to questions from the press in Prelog, where reporters asked him about the situation in shipbuilding ahead of a court hearing on the bankruptcy of the 3. Maj dock in Rijeka and after bankruptcy proceedings were opened in Pula's Uljanik.

Asked about a dredger for which Belgium's Jan De Nul company has enforced guarantees, Horvat recalled that an attempt was made last October to agree on the completion of the vessel at Uljanik, but when bankruptcy proceedings were launched, Jan De Nul enforced guarantees and the Finance Ministry paid 4.4 billion kuna.

He said there were two other ships worth 120 million kuna which the government expected to be cancelled, too, because there were no prerequisites at Uljanik to resume construction.

In the wake of Uljanik's bankruptcy and the situation in the ailing 3. Maj, Horvat reiterated that the government no longer could nor wanted to pay for enforced guarantees.

He said he would be happy if he could give good entrepreneurs 4.4 billion kuna from the state budget, adding that, combined with EU structural funds, that would make a 5% GDP growth possible.

Speaking of 3. Maj, Horvat said the clients whose ships were unfinished were interested in financing their completion and that talks were under way on the completion of four ships.

He said no money from the state budget would be transferred into 3. Maj's account, adding that one option was to make loan arrangements whereby banks would pay invoices and bills approved exclusively by the dock's management in order to finish at least three of those four ships.

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

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, May 21, 2019 - Economy, Entrepreneurship and Crafts Minister Darko Horvat said on Monday that a delegation of the China Shipbuilding Industry Corporation (CSIC) was visiting the Shipping Institute in Zagreb and that it would be visiting the 3. Maj dock on Tuesday.

Horvat told reporters outside Government House that the Chinese delegation was at the Shipping Institute and that the meeting there could be yet one more good meeting "the delegation had hinted at" the last time it visited Croatia.

The minister said that the delegation would visit the Rijeka-based 3. Maj shipyard tomorrow and would then meet with him on Tuesday evening. "I think that then we will have a little more information about what exactly they have seen and what their feelings are at the moment," said Horvat.

Asked whether the Chinese delegation was interested only in 3. Maj and not the Uljanik shipyard since it had announced only a visit to 3. Maj, Horvat recalled that during its last visit, the Chinese delegation spent a day and a half at Uljanik and only a few hours at 3. Maj.

He said that the visiting delegation was more of a technical nature.

Asked how the Chinese company could become involved in developments regarding the Uljanik shipbuilding group (comprising the Pula-based Uljanik dock and the Rijeka-based 3. Maj) considering that it was not interested in strategic partnership, Horvat said that diversification of production was discussed at the talks conducted during the delegation's last visit and that the Pula and Rijeka docks need not exclusively and necessarily produce only ships.

Asked about a request by the Jan De Nul company for a refund of a down payment for a dredger that is being built at Uljanik, Horvat said that a new proposal had been sent to Luxembourg and that Croatia was not prepared to pay all the interest Jan De Nul had requested as compensation. "We can accept both scenarios - the ship's being completed at the Pula dock or its being towed away. We are negotiating the cost of both options," he said.

Asked whether he still believed that the cost would not be more than 30 million euro as mentioned, Horvat said that about 17 million euro was required to complete the ship. "Any additional risks should not amount to more than 22 million euro, and should we have to pay for towing, the cost will amount to a maximum 30 million that we are willing to pay," he added.

Asked whether it might have been cheaper for the state to have paid workers their wages to complete the ships under construction and thus avoid the enforcement of guarantees, considering that it would pay about 5 billion kuna in all for the shipyards, including interest, Horvat said that over the past 18 months the state had exploited every legitimate method to help workers.

He said that representatives of the Croatian Employment Service would inform workers of the Pula-based Uljanik dock, for which bankruptcy proceedings have been opened, about their rights. "The state is doing all it can within its remit," he said.

Asked about three ships that will be transferred to state ownership and what the state intended to do with them as well as whether they would be completed in Uljanik or some other shipyard, Horvat said that the government was willing to become involved in the completion of those ships only and exclusively as part of the bankruptcy plan and on a market basis.

"If we manage to invest less for their completion than their market value and if we will have a buyer when they are completed, then we can discuss the completion and interim financing by the government. If there is no market basis, then the government won't enter any such process," he said.

Considering that Uljanik's former CEOs were released from investigative custody earlier in the day, reporters wanted to know if the public would ever know "who is guilty," to which Horvat said that he did not wish to comment on the court's decision.

The County Court in Rijeka on Monday ordered the release of six suspects in the Uljanik fraud case from investigative detention.

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

ZAGREB, May 20, 2019 - More than 1,100 workers of the Pula-based Uljanik shipyard started receiving notices of employment termination on Monday after bankruptcy proceedings were launched on May 13.

The workers will come for work during the 30-day notice period, and this will be added to their years of service, according to union leader Boris Cerovac.
In the meantime, the County Court in the northern Adriatic city of Rijeka on Monday ordered the release of six suspects in the Uljanik fraud case from investigative detention.

The six suspects were remanded in custody because there was a risk that they might try to influence the witnesses.

Court spokesman Zoran Sršen said that there were no more grounds for detention because all the witnesses had been interviewed during the investigation.

The six suspects are former Uljanik Group management board chair Gianni Rossanda, former Uljanik Group management board members Marinko Brgić and Veljko Grbac, former 3. Maj shipyard board chair Maksimilijan Percan, former Uljanik Plovidba director Dragutin Pavletić, and former Uljanik shipyard director Silvan Kranjc.

Also suspected in this case are eight other persons as well as the Uljanik Plovidba company.

They are suspected of committing financial wrongdoing and state aid fraud at the Uljanik and 3. Maj shipyards between January 2010 and mid-October 2017, whereby the two companies and the state budget were defrauded of 1.2 billion kuna (162 million euro).

More news about Uljanik can be found in the Business section.

ZAGREB, May 17, 2019 - Unprofitable businesses will no longer be financed from the state budget, Economy Minister Darko Horvat said on Friday, noting that after bankruptcy proceedings had been launched for Uljanik d.d., the umbrella company of the Uljanik shipbuilding group, negotiations would continue with investors who had commissioned four ships that were being built by the Pula-based group.

The Commercial Court in Pazin decided earlier in the day to launch bankruptcy proceedings for the company over a debt of 98 million kuna.

Horvat said that he learned of the proceedings from media reports. "I... am aware of the fact that some things that are in the final stage of negotiations and concern the four vessels that are under construction could have been negotiated outside the bankruptcy proceedings. But the process goes on and we are continuing talks with both Jan De Nul and colleagues from Canada on ways of completing those ships, in the Pula or the Rijeka dock or somewhere else," Horvat told reporters on the margins on a business conference.

Horvat said that banks and the state would become owners of the ships that are being built by Uljanik.

He said that talks with the Belgian Jan De Nul group, for which Uljanik is building a dredger for which the government has given collateral in the amount of 125 million euro, were continuing.

Asked to comment on Uljanik workers' 'congratulating' him on buying taxpayers vessels worth millions of euros and saying that he cared more about ships than people, Horvat said that he did not agree. "We tried to postpone the bankruptcy proceedings as much as we could.... but the state budget will no longer finance unprofitable projects," said Horvat.

Asked what the bankruptcy of the umbrella company of the Uljanik group meant for other companies in that group, he said that bankruptcy proceedings would be launched successively in other companies as well.

He, too, reiterated that a technical delegation of the China Shipbuilding Industry Corporation (CSIC) would arrive in Croatia on Monday and that aside from Uljanik, it would also visit the Zagreb-based Brodarski Institut and the Rijeka-based 3. Maj shipyard.

Asked if talks were also underway with Danko Končar and Tomislav Debeljak about the takeover of individual Uljanik group companies or the completion of individual vessels, Horvat said that the government was not conducting talks with either man. "I'm not thinking in that direction at all," he said.

He explained that after bankruptcy, Uljanik workers would be registered with the Employment Service and that Labour and Pension System Minister Marko Pavić had come up with measures to help them return to the labour market. "Also, close to 1,200 people will get from the state the maximum they can get at the moment," he said.

Uljanik d.d. has 20 employees, but so far, a number of companies from the Uljanik group have gone bankrupt. Earlier this week, bankruptcy proceedings were opened for the Uljanik shipyard, which has 1,118 employees. Bankruptcy proceedings have also been launched for five other companies from this group.

Whether bankruptcy proceedings will also be launched for the 3. Maj shipyard, which is part of the Uljanik group and employs 800 people, will be known at a hearing at the Rijeka Commercial Court set for June 5.

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

ZAGREB, May 17, 2019 - The Commercial Court in Pazin decided on Friday that bankruptcy proceedings will be opened in the Uljanik shipbuilding group's umbrella company, Uljanik d.d.

The company's bank account has been frozen for 199 consecutive days over a debt of 98 million kuna, it was said during today's hearing. Judge Damir Rabar said there were no extenuating circumstances or possibility for the situation to improve.

Emil Bulić, chairman of the company's board, said no offer had arrived from Chinese partners, only an announcement that a team of their engineers would arrive to discuss future technical cooperation.

Judge Rabar said this cooperation could continue during the bankruptcy proceedings.

Uljanik d.d. has 20 employees. It is the sole owner of the 11 companies within the Uljanik shipbuilding group and has an 87% stake in the group's 3. Maj shipyard.

Bankruptcy proceedings have been launched in several companies within the group, including the most important one, the Uljanik shipyard, earlier this week. The Rijeka Commercial Court will decide on June 5 if bankruptcy proceedings will be opened in 3. Maj, too.

A motion to open bankruptcy proceedings in Uljanik d.d. was filed by the Financial Agency on March 5. Interim bankruptcy trustee Damir Majstorović said in a report on April 24 that the company was insolvent and overindebted.

A bankruptcy hearing was to have been held on May 3 but was adjourned until today, pending a final decision from the China Shipbuilding Industry Corporation regarding the Uljanik and 3. Maj docks. A Chinese delegation visited the shipyards at the end of April and in early May. Their decision is unknown for now. Earlier this week, Prime Minister Andrej Plenković said the delegation was expected for another visit in the next ten days.

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

ZAGREB, May 13, 2019 - The Commercial Court in Pazin on Monday opened bankruptcy proceedings in Pula's Uljanik shipyard.

Judge Ivan Dujić announced on April 24 he would open bankruptcy proceedings if Uljanik's bank account was not unfrozen by May 13.

The chairman of the shipyard's board, Sandi Božac, said Uljanik's account had been frozen for 231 days now. According to the latest Financial Agency (Fina) figures, the dock's debt totals 164.8 million kuna, including 76.5 million kuna in workers' receivables.

Uljanik has 1,118 workers, of whom 1,058 in Pula and 60 in Rijeka.

Over the past month, bankruptcy proceedings have been opened in four other companies of the Uljanik shipbuilding group. A hearing is scheduled for May 17 at a which a decision will be made as to whether bankruptcy proceedings will be opened in the group as well.

Motions for launching bankruptcy proceedings in the group's companies, including the 3. Maj dock in Rijeka, have been filed by Fina because their bank accounts have been frozen over 120 days.

Fina filed the motion for the Uljanik shipyard at the end of January because its account was frozen for a debt of 75.9 million kuna.

The bankruptcy hearing for the dock was postponed twice, the last time on April 24 because representatives of the China Shipbuilding Industry Corporation visited the shipyard and 3. Maj at the end of April and the start of May. The intentions of the Chinese regarding the two dock remains unknown.

Croatia no longer has a shipbuilding industry as of today, Adriatic Union president Boris Cerovac said in Pula on Monday after the Commercial Court in Pazin opened bankruptcy proceedings in the shipyard.

The dock's chairman of the board, Sandi Bozac, said Uljanik's account had been frozen for 231 days now. "We are heading for an end because we definitely found no reason to delay today's hearing. The Chinese have shown a certain interest, but that's a long process and no concrete offer has been received so far. However, independently of the bankruptcy, the Chinese partner can always get involved because bankruptcy won't turn them away," Božac told reporters.

"If someone thinks shipbuilding will stay at Brodosplit or Brodotrogir, they are very wrong. The only shipyard that could build high-tech ships is Uljanik. Therefore, if Uljanik is gone, so is shipbuilding," said Cerovac.

According to him, the biggest responsibility is with the government and parliament, "everyone... who could have... responded promptly, but did not." He said the prime minister and the ministers of the economy and finance "did not help, as their main goal was the closure of the shipyards in Pula and Rijeka."

"They have kept workers without pay for eight, nine months, destroying many families... making people leave Uljanik, Istria and Croatia," Cerovac said, adding that "the state gave up on Uljanik, which is 163 years old, long ago."

Shop steward Đino Šverko said he, too, was disappointed with the inaction of the government and state institutions. "They didn't do what they were promising the whole time, which was restructuring. They were stalling us the whole time and now their biggest worry is if the client Jan De Nul will agree to having a ship built in Croatia. They care about steel, about ships, but they don't care about people. That's not statesmanlike," he said, adding that Prime Minister Andrej Plenković and Economy Minister Darko Horvat "should be ashamed."

Šverko expects a bankruptcy trustee to arrive at Uljanik on Friday or next Monday and star firing people.

Commenting on the court decision to open bankruptcy proceedings in Uljanik, Pula Mayor Boris Miletić of the Istrian Democratic Party (IDS) said that the incumbent government would be remembered as the one that had destroyed the Croatian shipbuilding industry and signed the surrender of the Croatian economy.

"The process of pushing Uljanik towards bankruptcy has been marked by the lack of any courage, political responsibility and human decency," Miletić said in a statement.

He said that the shipyard's management was responsible for the company's operations but that the state could not be exempted from responsibility as the single biggest shareholder in Uljanik with a 25% interest.

"Bankruptcy will have traumatic consequences for the entire Croatian economy. Uljanik has been an economic and cultural symbol of Istria and has provided livelihoods for thousands of families for 163 years," he said.

He said that due to centralisation, neither the city nor the county authorities had at their disposal any mechanism to influence the shipyards' operations or intervene after Uljanik had found itself in crisis.

Miletić noted that the city and county authorities had launched a number of measures to help Uljanik workers and their families, including free retraining courses, measures designed to encourage employers to hire Uljanik workers who have lost their jobs, and the appointment of a commission to assist workers.

More Uljanik news can be found in the Business section.