ZAGREB, March 20, 2019 - Economy Minister Darko Horvat said on Wednesday, when asked by the press if bankruptcy would be cheaper for the Uljanik shipyard than restructuring, that initially numbers would show that bankruptcy was cheaper but that, in the long run, this was not certain.

"In the first stage, the numbers will certainly show that it's cheaper to file for bankruptcy, but in the long run, in the next ten years, it's a matter to discuss. We certainly won't get the exact figure and will have to simulate some things, I suppose," he said.

Asked ahead of a ruling coalition meeting if the coalition should decide today whether Uljanik should file for bankruptcy or be restructured, Horvat said the coalition would not make decisions but that it would talk.

Asked how much restructuring would cost, he said 930 million euro. "That's between 6.8 and 7 billion kuna."

Speaking to the press ahead of the meeting, Finance Minister Zdravko Marić said taxpayers had the right to see how much had been paid for Uljanik so far and how much more had to be paid. "Things are very serious. We have paid quite large amounts so far. A few days ago, I said 3.1 billion kuna had been paid in enforced guarantees so far for the building of mainly non-existent ships."

Asked to comment on Horvat's claim that between 6.8 and 7 billion kuna was needed for Uljanik's restructuring, Marić said he could comment only on exact figures. "Certainly, the whole financial aspect should be taken into account because it's not small but... I'm also looking at the big picture, the significance, worth and importance of the shipbuilding industry in all these years. We are all saying it's a strategic industry, DZS (national statistical office) figures shed a different light and all of that should be taken into account."

Marić would not comment on Horvat's statement that bankruptcy would be cheaper for Uljanik, saying that one should look at the bigger picture and that the ruling coalition would discuss the matter today.

Asked if a concrete decision might be made today, he said he would not speculate.

MPs Tulio Demetlika of the Istrian Democratic Party and Silvano Hrelja of the Croatian Pensioners Party urged the government on Wednesday to give the ailing Uljanik shipyard the same chance it had given every other shipyard and save the essence of Croatia's shipbuilding.

Speaking at a press conference, Demetlika said Uljanik deserved the same treatment as the shipyards restructured a few years ago. He said the state had indeed invested 31 billion kuna in shipbuilding but that it reluctantly pointed out that 37% of that had gone to Brodosplit, 30% to 3. Maj, 15% to Brodotrogir and only 10% to Uljanik.

Demetlika said he was confident Uljanik could get back on its feet and again drive the development of the city of Pula if run conscientiously and responsibly.

He said he dock had become synonymous with the incumbent government's ignorance and incompetence, which he accused of having issued guarantees without any supervision and of shifting responsibility to the local government, although it is the largest shareholder in Uljanik.

Demetlika accused the government of having deliberately causing the workers' strike in Uljanik and of a total lack of transparency concerning the dock. He called on the government to consider its omissions when adopting a political decision on Uljanik's fate.

He also said it was inconceivably irresponsible that one minister claimed restructuring was the best option and another claimed the opposite. "Does anyone in the government wonder why world players should invest in Croatia's shipbuilding industry when even the government doesn't know what to do about it?"

Hrelja told the same press conference that the government had invested HRK 31 billion in shipyards to cover the losses of its own companies and buy social peace, and that it had never known what to do about shipbuilding, causing huge damage to the reputation of the country and the industry.

He said it was important to save "the essence of Croatia's shipbuilding", not administrative jobs but production, adding that a ship currently under construction "means 2% of GDP." He too said "no world corporation or private businessman would enter into such a messy state of affairs."

Hrelja said Croatia had serious experts who could bring order to Croatia's shipbuilding and control financing so that the state could become a majority owner. He added that Italy was "a successful model" showing that it could be done.

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

ZAGREB, March 15 (Hina) - Following the announcement by the opposition Živi Zid party that it would file a criminal complaint against the owner of the Brodosplit shipyard, Tomislav Debeljak, the shipyard's management, Prime Minister Andrej Plenković and his predecessors Tihomir Orešković and Zoran Milanović, and former Economy Minister Ivan Vrdoljak for financial wrongdoing at the Split-based shipyard, the ruling HDZ and the strongest opposition party SDP denied their responsibility for the current problems at Brodosplit, accusing each other of financial machinations.

The chairman of the HDZ parliamentary group, Branko Bačić, said that criminal complaints were Živi Zid's "modus operandi", adding that what people thought of them was best shown by a fall in their approval ratings. He said that the government of Prime Minister Plenković cared about the shipbuilding industry, especially about the Uljanik Group, but had to deal with problems of the previous SDP government.

"When (the SDP-led government) said in 2012 and 2013 that the five billion kuna invested was the last the government was giving and that there would be milk and honey after that, they obviously were not telling the truth. Already by the end of 2015, at the end of the SDP's term, a guarantee was issued to Uljanik which was not spent on what it was issued for, so that last year we had to allocate 916 million kuna so that workers could receive their wages. That was done by this government to give the management enough time to agree a restructuring plan and find a strategic partner, but it turned out that they did not find a partner and the plan was made sloppily," Bačić said.

Branko Grčić, an SDP MP and former deputy prime minister in the Zoran Milanović government, described Živi Zid's move as "the initiative of a group of people who never even ran a local council, which means that they never took care of thousands of people who worked or who work in the shipbuilding sector."

"They don't understand the significance of the shipbuilding industry for the Croatian economy and state. Shipbuilding accounts for about 15 percent of exports and that is reason enough to fight for this industry," Grčić said.

Grčić said that contrary to their statements, the present and previous HDZ governments had issued about 360 million euro in guarantees to Uljanik and a further 45 million dollars to the Uljanik shipping company, but nothing of that "was built into the ships". "After a while they faced a crisis at Uljanik, whereas what we did produced certain results and was visible in the delivery of newly-built ships."

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

ZAGREB, March 15, 2019 - A decision on the ailing Uljanik Group will be partly political, but primarily economic and financial in nature, Finance Minister Zdravko Marić said on Friday after devastating financial reports about the group prompted him to wonder about the current importance of the shipbuilding industry for Croatia.

"There is a political element in the decision making in the whole process, however, I primarily see it as an economic and financial decision, considering that we have so far paid 3.1 billion kuna through enforced guarantees, and you can add all that has been paid for the entire shipbuilding industry in the past 25 years ... The amount climbs to 35 billion kuna. I ask myself and you what importance the shipbuilding industry can then have," Marić said.

Asked by the press while coming to a government meeting when an analysis of Uljanik's business might be unveiled, Marić said that some segments of the analysis would be presented today and some next week. He recalled that 2.45 billion kuna was allocated to pay Uljanik's enforced guarantees in 2018.

Unfortunately, more guarantees will be enforced this year. First, there was mention of 2.8 billion kuna, and now 3.1 billion kuna, Marić said, adding that the amount could rise further.

Economy Minister Darko Horvat told reporters while coming to the government meeting that claims that an additional seven billion kuna would be necessary for overhauling the Uljanik Group is "a spin".

He confirmed that the total cost for assistance in overhauling the group was seven billion kuna, and that the government had already paid 3.1 billion of that amount.

More news on the Uljanik shipyard can be found in the Business section.

ZAGREB, March 13, 2019 - Finance Minister Zdravko Marić on Wednesday said that the ministry's analysis of the Uljanik Group was nearing completion and that to date 35 billion kuna had been pumped into shipbuilding and that he cannot see how to justify an additional 7 to 10 billion kuna for Uljanik.

Furthermore, it doesn't seem to him that it is possible for the costs of restructuring and bankruptcy to be the same.

"There is no dissension, we are working as members of the government, aware of certain matters and problems," Marić answered reporters when asked whether any misunderstanding existed between him and Economy Minister Darko Horvat regarding Uljanik and the debate on restructuring the Pula-based dock or possible receivership.

Marić said that the Finance Ministry is nearing completion an analysis of Uljanik and that the final details are being hammered out and that after that, it will be presented to the cabinet and ruling coalition.

"Regardless of the fact that the issue of Uljanik is currently being observed in a binary way -- bankruptcy or restructuring -- it is not that easy to answer that question as the entire situation is a lot more complex. In the analysis, we are not looking only at the situation in the Uljanik group from the perspective of guarantees and separated segments but rather as a comprehensive overview which among other things includes to what extent the budget will be affected, the economy, industrial production and exports and what the global situation and trends are on the market itself," Marić told reporters.

He informed that until yesterday 3.1 billion kuna had been paid to cover enforced guarantees. However, he added, considering other guarantees issued there is a possibility that that amount could increase by a further 300 million kuna to 500 million kuna.

At the same time the share of shipbuilding in industrial production over the past three years has been less than 1.5%. In January, that share was 0.8%, he said.

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

ZAGREB, March 12, 2019 - A hearing before Rijeka Commercial Court to determine whether conditions exist for initiating bankruptcy proceedings for the 3. Maj shipyard was once again postponed on Tuesday, until March 28, to see whether the relevant ministry, the strategic partner and management will manage to reach an agreement on the payment of overdue wages and the continuation of production.

Bankruptcy trustee Zdravko Ćupković and union representatives agreed with the adjournment.

All creditors have been offered an agreement on debt repayment, under which 15% of the debt would be repaid by April 15 and the rest by the end of the year. One third of the creditors have signed the agreement so far.

Judge Liljana Ugrin said that she had received information from the FINA financial agency this morning stating that the shipyard's account is blocked due to a debt of 91 million kuna and that 18.7 million kuna referred to workers' wages.

The judge said that a report by Ćupković notes that because 3. Maj is involved in shipbuilding, a bankruptcy plan is almost impossible. There is no finance department, no design bureau but only production, however a new reorganisation is underway which foresees the re-establishment of these services, she added.

The preliminary procedure regarding bankruptcy was launched in early January and a hearing was set for February 26, which was adjourned until today. Ćupković then explained that the shipyard wasn't overindebted and that it had 522.2 million kuna at its disposal as well as property that would be sufficient to settle the costs of a bankruptcy.

Economy Minister Darko Horvat met on Monday with Uljanik's management and the strategic partner, Tomislav Debeljak, after which he said that the government was expected to decide this week whether the restructuring of the Uljanik shipbuilding group would go ahead or not.

"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 a bankruptcy," Horvat told reporters after the meeting.

More news about Croatia’s troubled shipbuilding industry can be found in the Business section.

ZAGREB, March 12, 2019 - The government is expected to decide this week whether the restructuring of the Uljanik shipbuilding group will be launched or not, Economy Minister Darko Horvat said on Monday following a meeting with Uljanik's management and strategic partner, Tomislav Debeljak.

"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 a bankruptcy," Horvat told reporters after the meeting. He said that a joint proposal was aimed at a "new rescue aid loan" to ensure interim financing.

The minister said that the strategic partner has "good intentions to participate in creating a better and sustainable Uljanik with his resources of more than 35 million euro." "However, we have to accept the fact that the deficit produced in the past 10, 12 or 15 years is somewhere in the region of between 900 million and 1.1 billion euro," Horvat said.

He added that the strategic partner insists that all debts from the past be covered by the state while assuring that the state budget will not have to pay even one kuna for Uljanik in the future. "I'm sure a decision will be made in the next few days. If it is positive, then certain guarantees will be discussed at the next government meeting regarding this model. If that decision is not reached, certain solutions will be made at the next cabinet meeting regardless of the negative or positive impact on the workers and unions."

Horvat said that a court hearing on a possible bankruptcy for the 3. Maj shipyard was scheduled for Tuesday and that he would try to convince the judge that conditions have been met for the bankruptcy not to go ahead.

He added that Uljanik's possible bankruptcy could cost the state between 800 million and 900 million euro, whereas the group's restructuring required between 860 million euro to 1.1 billion euro.

Tomislav Debeljak said he hopes the state will want to embark on healing the company and head toward its restructuring. He said that the restructuring plan for Uljanik is in its final phase.

The president of the Uljanik Group's management board Emil Bulić said that they had received assurances that a decision would be made this week and that efforts were being made to avoid insolvency procedures.

SSSH union federation leader Mladen Novosel said that the unions expect the government to come up with a final decision when it meets on Friday whether to restructure the group or not. If it decides for restructuring, we expect the technical details to be resolved with banks in the next few days so that workers can be paid their wages and remain at the dock and finish the ships that need to be completed.

More news on the Uljanik shipyard can be found in the Business section.

ZAGREB, March 8, 2019 - Economy Minister Darko Horvat said on Friday that the financial situation at the Pula-based Uljanik shipbuilding group should be "reduced to zero" before restructuring began in cooperation with the strategic partner.

"The debt is huge and we should not shrink from it," Horvat told reporters on the margins of a conference on the future of family businesses, organised by Lider business weekly.

He said that the European Commission was very clear in its guidelines on who should redress the consequences of bad decisions made in the past, adding that those should be "shareholders and creditors."

"Before including Mr Debeljak as the strategic partner in the restructuring process and before starting the restructuring process itself, we need to reduce the financial situation in the whole Uljanik Group to zero. Today and tomorrow we will try to find a source of financing to make that possible," Horvat said.

He said that Tomislav Debeljak had found during the due diligence process that there was an equity deficit of 1.1 billion euro. He added that Debeljak had told him again on Thursday that he was not willing to cover the debts from the past.

More news on the Uljanik shipyard can be found in the Business section.

ZAGREB, March 6, 2019 - Economy Minister Darko Horvat said on Wednesday that financial data about the Uljanik shipyard's performance did not look well, and they were actually worse than what was put on paper before.

Asked by the press whether he was going to meet with unionists from Uljanik, the minister said that a meeting was planned and that before a meeting with all stakeholders including unionists, the management and strategic partner Tomislav Debeljak could be held an analysis needs to be prepared.

"The stats do not look well. They (problems) are bigger than what has been put on paper so far," Horvat said.

"We have to know what the sins of the past were and what the current state of affairs is, so that I can freely ask Mr Debeljak to undertake any action concerning the continuation of the shipbuilding business," he said.

Debeljak is being asked to provide assurances that the ships that are near completion, will be completed, so that guarantees in the amount of 1.8 billion kuna offered by the government are not enforced.

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

ZAGREB, March 4, 2019 - The solution for the Uljanik Group has to be sustainable and in accordance with European Union regulations and it has to bring the Uljanik and 3. Maj docks closer to market principles, Prime Minister Andrej Plenković said on Monday.

Responding to reporters whether the government is closer to an agreement with Brodosplit owner Tomislav Debeljak regarding a solution to the ailing Uljanik Group, Plenković announced a series of meetings this week and underlined that a "solution has to be found that is sustainable and in accordance with state subsidies at the European Union level."

Asked whether he was an optimist or pessimist in regard to thre shipyard, he said that he is a realist, just like he was last year when it was decided to help Uljanik and when, as he said, he very openly told workers, management, unions and others what options were on the cards," and that he did the same in the 3. Maj dock.

"There are no balloons here or illusionist activities. There is one reality in which each new transformation of shipyards has to be closer to functioning on market principles," Plenković said and added that the amount of state support from the preceding period simply isn't realistic.

Asked whether the government would meet Debeljak's conditions and settle Uljanik's debts, he said that his bid is being analysed.

Economy Minister Darko Horvat said on Friday an "analytical discussion" about models and programmes for the overhaul of the Uljanik Group would be held next week with the recently selected strategic partner Tomislav Debeljak, who is the owner of the Brodosplit shipyard, and the most suitable model would be later presented to the government and Prime Minister Plenković.

Horvat said that the ministries of economy and finance would begin the analytical discussion with Debeljak and the Uljanik management on Monday.

More news on the Uljanik shipyard can be found in the Business section.

ZAGREB, March 1, 2019 - Economy Minister Darko Horvat said on Friday an "analytical discussion" about models and programmes for the overhaul of the Uljanik Group would be held next week with the recently selected strategic partner Tomislav Debeljak, who is the owner of the Brodosplit shipyard, and the most suitable model would be later presented to the government and Prime Minister Andrej Plenković.

Horvat said that the ministries of economy and finance would begin the analytical discussion with Debeljak and the Uljanik management on Monday, and the outcome of the discussion would be presented to the government.

The minister also believes that Debeljak had enough time in the past two weeks to specify his proposal and a financial scheme. He also said that he possessed information that the strategic partner had contacted several local and foreign banks for this project, however, Horvat did not know if any of those lenders decided to help the businessman in this project of the future restructuring of Uljanik,

Horvat recalled that Debeljak will be given a month to hammer out the overhaul plan and that the European Commission has informed Zagreb that it will need three to four months to assess the plan.

Asked by the press about the postponement of the publishing of financial reports for the Uljanik and 3. Maj shipyards' performance in 2018, the minister referred reporters to the company's management board.

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