February 6, 2023 - Great Success for Iskra Shipyard 1, where the handover tests confirmed a great success - they managed to build a flawless boat for emergency medical assistance.

As Poslovni writes, the first Croatian boat from the series contracted as early as 2021, produced as part of the Search and Rescue (SAR) project for emergency medical interventions at sea and on islands, passed extremely complex tests at the request of the Ministry of Health as the customer.

Intended for Dubrovnik

Built from aluminum alloys in ideal conditions, it reaches a maximum speed of almost 35 miles per hour. With a hull length of 15 meters, the boat can sail as the only means of transport in conditions where even helicopters cannot fly. It is practically unsinkable.

This is its main characteristic - when it capsizes, it stands up again, and not a drop of water enters the cabin, so it is equipped with modern medical equipment and forms the first and most important 'link' in the establishment of emergency maritime medical services in the Republic of Croatia. According to the latest information, it is intended for Dubrovnik.

The achievement brings multiple benefits for the builder Iskra Shipyard 1 in Šibenik, including references for new business on the international market. And the Ministry of Health of the Republic of Croatia, as the client, can count on, in addition to the delivery of the first boat announced by the end of the month, the orderly delivery of five more SAR boats of the same quality by the end of the year, confirms the Administration.

Thus, the people of Šibenik are building sophisticated boats at full steam as part of the project of establishing an emergency maritime medical service, which is co-financed by the EU. The work of building and equipping six emergency boats is worth around HRK 76.4 million, and it was jointly won by Iskra Shipyard 1 and Tehnomont from Pula as the best bidder.

The shipbuilder from Pula later withdrew under the pressure of the contract book, and the period from tendering to contracting stretched to about a year.

The Šibenik shipyard in the ownership portfolio of the Slovenian Iskra Shipyard is experiencing a revival on several grounds. Along with characteristic workboats for the Scandinavian market, it is constantly improving its business with new investments. Now it is confirming its competitiveness with the SAR project as an 'entrance' to the market of high-speed ships for civil and military purposes.

Iskra Shipyard's majority owner Dušan Šešok, as well as the directors - Aleš Ekar, who was in the cabin in the cockpit during the testing of the boat's resistance to a 180-degree side roll, and Roko Vuletić point to the new perspective that opens up.

"It was a very sophisticated ship for us and a big task that our engineers and employees did well, so a new page is being opened for our shipyard. Now we have a world reference with which we will go to tenders for such ships in the entire Mediterranean", Sešok, the majority owner of Iskra, told Poslovni dnevnik.

Tender for patrol boats

The premise for this is that the first boat platform produced applies to different projects because it is practically the same regardless of whether it is a harbor master ship, a medical ship, or for ecological research.

This is already shown in the current tender for seven high-speed patrol boats under the Ministry of the Sea, Transport, and Infrastructure jurisdiction since, according to Šešok, the offer of the Iskra Shipyard in Šibenik proved to be the most favourable.

A decision on the selection is expected soon, and the people of Šibenik will be interested in the tender announced in Slovenia for such a sophisticated ship as part of the activities of the marine biological station there.

The design for the boat was made by the Croatian branch of the American company Metal Shark, which is the world leader in the design of this type of vessel. They will be able to accommodate three crew members and nine people, and apart from emergencies, these boats will also be used for search and rescue at sea.

For more, make sure to check out our dedicated News 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.

ZAGREB, 4 March, 2021 - The Viktor Lenac shipyard posted a net profit of HRK 34.6 million in 2020, which is 66.1% more than in 2019, according to an unaudited financial statement released on Wednesday by this dock, based in the municipality of Kostrena near Rijeka.

The company's total revenues fell 4.2% to HRK 306.2 million, and the expenditure decreased 11.2% to HRK 265.1 million on the year, according to the financial statement released on the Zagreb Stock Exchange (ZSE).

The dock's EBITDA came to HRK 73.6 million.

In 2020, there were 364 employees on the company's payroll and their average monthly wage was HRK 7,853.

(€1 = HRK 7.5)

ZAGREB, June 18, 2020 - The government on Thursday adopted a conclusion that expresses its readiness to join in the process of issuing state guarantees the Brodotrogir Cruise, Uljanik Brodogradnja 1856 and MKM Yachts shipyards.

"The signal we are sending today is our determination for Croatia's shipbuilding to continue functioning (...) and that we wish to continue supporting shipbuilding on healthy foundations," Prime Minister Andrej Plenkovic said.

Economy Minister Darko Horvat recalled that the ministry had received a request from Brodotrogir Cruise for a state guarantee to ensure advance payments for two passenger polar cruise ships for two American clients.

The total value of each ship is €39 million, and the clients will make an advance payment of 80% or €31.2 million for each ship, on the condition that the shipyard obtains a bank guarantee for the buyer.

"The shipyard has requested state guarantees in the amount of €24.96 million for each ship, which is 80% of the total advance payment and 64% of the sales price," Horvat explained.

The ministry also received a request from the Uljanik dock for a loan in the amount of €4.33 million to launch production. The loan would be secured with a state guarantee earmarked exclusively to launch production at the newly-founded company at the dock.

The Rijeka-based MKM Yachts dock too submitted a request for a state guarantee for a loan of just over €100 million for the construction of a ship for a client from Malta. The guarantee would cover 80% of the loan or €80.13 million.

These guarantees will be activated in phases so that the amount the government will guarantee cannot exceed 64% of exposure by the end of 2021, after which the state's exposure should decrease to a maximum of 48%, Horvat explained.

"With this conclusion, the government provides full support to the shipbuilding industry in Croatia with the aim of continuing production and retaining Croatia's reputation on the shipbuilding market. This conclusion obliges the Ministry of Economy, Entrepreneurship and Craftsto launch proceedings, in cooperation with the Finance Ministry, to issue the requested state guarantees," Horvat concluded.

The word ''Croatian shipyard'' isn't bringing in the most positive of coverage of late.

Uljanik has dominated the press for several months, with its desperate workers even taking the streets in protest of the shipyard's management body. Losses are being recorded and with the state's hands tied to a certain degree, strategic partners are being desperately sought. Despite that, there may be light at the end of the tunnel for Croatian shipyards, as Uljanik completes the most expensive vessel to be made in Croatia, and the Viktor Lenac shipyard in Rijeka carries out maintenance for American vessels.

As Poslovni Dnevnik writes on the 19th of January, 2019, the USS Mount Whitney, a commander vessel, and its nearly three hundred crew members sailed to Rijeka yesterday. The Croatian shipyard ''Viktor Lenac'' has become their usual remodeling base, and this time the Americans will stay about a month and a half, which is the length of time the work on this war ship is scheduled for.

As Novi list reported, the American vessel will stay at the Croatian shipyard to undergo regular maintenance, with focus on drive groups and propulsion, as well as electrical systems of the ship.

This Rijeka-based Croatian shipyard expects to be able to get jobs on one or two other ships which make up the US Sixth Fleet by the summer, for which there is news that tenders will eventually be announced and published.

Such good deals are valuable, and the good cooperation the Croatian shipyard has with the US Navy is something that carries financial stability for Viktor Lenac. This good relationship proved to be the big business result of the year 2017 in which the last major upgrading of this sixth fleet vessel was undertaken. In the Martinšćica shipyard, they boasted an impressive record gain of 37 million kuna.

Results for last year, according to the so-called ''balance'' for the first nine months of 2018, are another story, since the Viktor Lenac shipyard had published huge losses of 11.9 million kuna by the end of September.

Make sure to stay up to date by following our dedicated lifestyle and business pages for much more.

Uljanik's woes continue as workers endure difficult times and strategic partners for the enfeebled Pula shipyard's appear to be moving cautiously and slowly. Despite that, the burdened Croatian shipyard is currently involved in completing the construction of the most expensive vessel constructed in any shipyard in the Republic of Croatia.

As Novac.hr/Barbara Ban  writes on the 18th of January, 2019, Australian Glen Moroney's Scenic Eclipse polar cruiser of the Scenic Group is currently in its final phases at Uljanik.

The outside molding of this luxurious polar vessel, which was worked on by as many as 400 to 700 people was completed, out of which about ten percent of Uljanik's employees were directly engaged. The rest of the ship has been being built by some of Uljanik's co-operatives and people from the Scenic Group itself. When finally finished, it will be part of a fleet of twenty luxury cruisers of which the aforementioned company is proud.

In addition, the vessel should be receiving its very first guests as early as this year, albeit with a great deal of delays given the fact that it was supposed to embark on its first trip at the end of August 2018. Work on the boat is now continuing without interruption, and on his first voyage, the cruiser will travel around the Mediterranean, with its first port of call being Barcelona. Booking for that trip has gone ahead, and because of the unwelcome delay the prices are somewhat less than they were originally. For all those who booked the first trip when the vessel was meant to be completed last summer, the company refunded customers their cancellation fees.

''This cruiser is one of the most complex vessels in its segment being built today on a global level and we're proud of it. We experienced significant difficulties where there was a shift in deadlines, however, Uljanik possesses the knowledge to create such a vessel in record time in relation to the circumstances. On several occasions, the owner himself emphasised that, in relation to the circumstances, the execution time was something beyond his expectations. The ship is now in its final phase,'' stated Uljanik's managing director Emil Bulić.

Otherwise, the Scenic Group commissioned another such vessel from Uljanik, and Uljanik has offered assurances that the shipowner has no intent of terminating this contract which was concluded a year ago. On the other hand, Australia's Moroney is one of the investors who is interested in Uljanik himself.

Give our business page a follow to stay up to date with Uljanik's unfolding situation and much more.

Click here for the original article by Barbara Ban for Novac.hr

As Morski writes on the 5th of January, 2019, the complete overhaul of Tito's "Galeb" ship is undoubtedly the largest projects thought up by the mayor of Rijeka, Vojko Obersnel, in the past few years. Will his critics stop him? Unlikely, but the cost might.

For years, Rijeka's longtime mayor Vojko Obersnel has been subject to a lot of understandable criticism for his buying and desire to maintain Tito's "Galeb", which has cost more than a million kuna to date, but those protesting Obersnel's to completely repair Galeb would typically shut up when told that the overhaul of Tito's former vessel would be largely financed by European Union funds.

After the official acknowledgment that this is really true came, there were no longer any real obstacles to a tender for the job. Obersnel's critics have mostly remained quiet, even if temporarily, and even some of the furniture from the ship has been renovated.

At the beginning of 2019, more precisely on the 3rd of January, a public tender was concluded for Galeb's renovation, and although they hoped from the City of Rijeka that there might be at least a few bids, only one bid arrived wanting the job of bringing Tito's ship back to life.

The City of Rijeka's administration were likely finding it difficult to come across at least one shipyard ready to take up this truly demanding job, the cost of which is estimated at approximately 27.6 million kuna. As the Fiuman.hr portal exclusively reports from a well-informed source, the only offer came from the Viktor Lenac shipyard, but they have set the cost of the forecast twice as high as initially expected. If their offer is accepted, it will cost about 60 million kuna to breathe new life back into Tito's Galeb.

The City of Rijeka now has two options in this situation. One of them is to secure the remaining 32 million kuna from their own sources, and the only realistic possibility for it is to take out a new loan, which must be approved by the City Council of the City of Rijeka, where Obersnel has, at least officially, no actual majority.

It's no secret that the City of Rijeka has been living on credit for years now, and at this moment, owing primarily to poor management of the city's budget, this amounts to as much as 277 million kuna. To briefly recall, Maribor in Slovenia was also once the proud owner of the title of European Capital of Culture, and for this reason the city almost suffered bankruptcy, and many well-informed individuals are afraid that a similar path is currently being taken by Rijeka, especially if a loan is taken out solely for the purpose of bringing Tito's vessel into the 21st century.

Rijeka's second option is to cancel the tender entirely, and given the huge difference between the forecasts and actual costs of the ship's overhaul, the announcement of a new tender is not reasonable and it is questionable whether or not, should that be the case, Galeb's overhaul would be completed by the end of 2020 as the current deadline is quite stretched.

Make sure to stay up to date by following our dedicated lifestyle page for much more.

Click here for the original article by Zoran Zdelar for Fiuman.hr

December 6, 2018 — The search for the Uljanik Shipyard’s savior didn’t reach into the depths of the Croatian or European business community. In fact, it didn’t go far at all. The government and current management reportedly settled on the man already holding the position since March: Danko Končar, a billionaire mining magnate and one of the richest members of Croatia’s diaspora.

The ailing shipyard’s board and government’s Economic Ministry are reportedly drafting a restructuring program which will be sent to Brussels, designed to end a year-long effort to map Uljanik’s way out of HRK 4.5 billion of debt. The obligations include substantial state guarantees which could put a dent into the Croatian budget if unpaid.

The Uljanik Group’s dissolution would cost thousands of jobs at a time when the nation can ill-afford another export-oriented economic sector collapsing.

“I would say this is now close to the end,” said president of Uljanik’s Management Board Emil Bulić. “It is time for us to reach a final decision.”

Končar claims his company Kermas Limited cannot begin its intervention until both the Croatian government and European Commission approve the plan.

Končar won't use his estimated $15 billion in net worth to directly bail out Uljanik. The new program doesn’t equate a strategic parter with financing, according to the Zagreb native.

The 76-year-old Končar added he’s willing to share the strategic partner role with others, or even step aside if necessary.

When asked if Uljanik is sustainable as a shipbuilding operation, Končar reportedly said he’s “always optimistic.” Earlier restructuring proposals suggested ditching the shipyard wholesale for real estate and tourism projects.

The shipbuilding industry's seemingly-perpetual crisis has been an albatross around the neck of successive Croatian governments. Former Prime Minister Zoran Milanović was among several to declare the ailing shipbuilding group’s restructuring “done” — in 2015.

“Croatia has not only saved, but has also strengthened its shipbuilding industry,” he said at the time, right after the group added 22 ships to its order books. The orders would keep the shipyard busy until 2018. Croatia's shipyards enjoyed a Renaissance. It didn't last.

The long list of profitable orders began petering out in late 2017, with few new ones taking their place. Uljanik Group’s 2017 losses totaled 680 million kuna, despite a growth in revenue over the previous year. As soon as the calendar flipped to 2018, Croatia’ largest shipyard was in crisis. The indebted shipyards were soon being compared to the flailing conglomerate Agrokor.

The shipyard needed an urgent injection of cash, setting off a year-long back-and-forth between a Croatian government trying to rescue the shipyards, and European rules limiting state aid.

The true scope of Uljanik’s financial distress emerged this summer, after the drawn-out search for a generous, cash-flush strategic partner instead produced a profit-first fiscal disciplinarian: Končar. The billionaire was already leading another shipyard, Brodotrogir in Split, through a messy restructuring. Eventually, Ulanjik stop paying its employees.

The lack of regular paychecks led to several union-backed strikes by workers at both Uljanik in Pula and 3. Maj in Rijeka.

The first attempt at a restructuring was sent back by the European Commission, with 75 objections. Some plans to rescue the shipyard envisaged a total abandonment of shipbuilding, instead turning to real estate.

The company has been living in triage ever since, seeking a strategic partner for months. Italian firm Finacantieri and Ukraine’s Smart Holding have been bandied about, alongside Končar, as potential partners. Yet neither has officially signed on.

The government’s recently-passed budget includes a minimum HRK 2.5 billion in enforced guarantees allocated to the Uljanik shipbuilding group.

Conversations between Končar and striking unions three days ago did not yield results, according to Boris Cerovac, leader of the Jadransko Union.

“[Končar told us] if we think of a ‘strategic partner’ as someone who will gives us advice, then yes we have that kind of strategic partner,” Cerovac said after the fruitless meeting. “If we think we have a ‘strategic partern’ who will give us money, that we do not have.”

That meeting ended with yet another strike by Uljanik’s workers.

Uljanik’s union leaders claim time is running out to cobble together a deal, as workers continue to clock in and out without receiving a full paycheck since August. (They have, however, gotten minimum wages of about HRK 2.750 for the month of October.)

The latest proposed rescue of Uljanik still leaves a door open for the company's other ailing shipyard — 3. Maj — to join the restructuring program. It also gives Končar leeway to back out of the deal if any changes or additions don’t suit him, Assistant Minister of Economics Zvonimir Novak said, according to Nacional.

Končar was coy about any other shipyard’s potential involvement, especially 3. Maj, which some claim is so close to Uljanik it creates needless competition. Končar disagreed, saying the shipyards' proximity could lead to synergy, not a duplication of services.

“One function can be handled in one shipyard, and another in the other one,” he said.

For more on the Uljanik shipyard crisis, click here.

Croatia's shipyards are struggling, and for a long time the state has had its hands firmly tied when it comes to offering them potential ways out of their issues. Uljanik's workers have previously gone as far as to take to the streets in protest against the way in which they're being treated, often going dangerously long periods without being paid. 

Issues at the very top of the management board have resulted in long wage delays for dedicated employees who have been made so desperate they have gone on strike, but it seems as of tomorrow, things will return to normal, at least for now...

As Morski writes on the 18th of November, 2018, in spite of the payment of minimum wages, negotiations between the Croatian Government and Uljanik's unions apparently did manage to bring fruit, as was announced on Monday, and the strike in which Uljanik's employees have continuously held since October the 22nd should come to an end.

''We've been paid the minimum for now, and we were promised that we'd not have to wait so long in October. We simply decided that it was time to stop the strike, because that's what the shipowners expect from us. We will be the ones ending ourselves if we don't continue to work. We'll take a fifteen day break from strike activities, but we won't disband the strike board,'' said Đino Šverko, a member of Uljanik's strike board, for N1.

He also said that Uljanik's employers had nothing against Uljanik and May 3 being separated.

''We have to start thinking about work. The strike is going on and on, if it lasts until the end of the month, we'll end up closing everything ourselves, we can't see a way out. We're starting work, we'll carry out our tasks and then everything remains in the hands of the the Croatian Government,'' Deni Širol told N1.

For more information on the state of the domestic economy, Croatian companies, business and the possible fate of Uljanik, make sure to follow our dedicated business page.

Will Uljanik be saved? Minister Horvat is in negotiations with four potential investors to replace Danko Končar as a partner.