ZAGREB, July 23, 2019 - The Commercial Court in the Istria County town of Pazin has set the value of an unfinished dredger the Pula-based Uljanik shipyard was building for the Belgian/Luxembourg group Jan De Nul at 1.059 billion kuna, and set the terms of sale.

The court ruled that at a first public electronic auction the vessel may not be sold for less than three-quarters of the value determined, or 794.2 million kuna. At a second auction it may not be sold for less than half its value, or 529.5 million kuna, and at a third auction for less than a quarter of its value, or 264.75 million kuna. In the event of a fourth auction, the starting price would be 1 kuna.

According to unofficial sources, an invitation to the first auction could be announced later this month and could be completed by late September, by which time it could be clear whether Jan De Nul would be the buyer and how much of the 920 million kuna guarantee the government would manage to recover.

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

There has been much talk of late about the potential fate of the enfeebled Uljanik shipyard, as well as the 3 Maj shipyard, and what the future might hold for Croatian shipbuilding as a whole. It seems that any potential boost that a Chinese investment could have brought to this ailing industry has been lost.

As Poslovni Dnevnik writes on the 21st of June, 2019, Minister Darko Horvat has admitted that there is no serious interest whatsoever from the Chinese in investing in Uljanik in Pula, or the 3 Maj shipyard in Rijeka, delivering a damaging blow to any remaining hopes that these shipyards could be brought back from the brink.

Horvat added that despite this bad news, the Croatian Government is currently engaged in trying to find a legal route for all of the ships currently at Uljanik and 3 Maj who are in a certain phase of completion are completed and delivered, signalling that there is every intention to honour obligations in spite of the dire situation the shipyards continue to find themselves in.

Economy Minister Darko Horvat was in Mokrice in Slovenia when he commented on the future of Croatian shipbuilding for the media, RTL writes.

Horvat said that the Chinese have no intention of entering as strategic partners in the Uljanik group, but they have expressed interest in the Brodarski Institute, which is located in Zagreb.

"The information I've received from the embassy in the People's Republic of China supports the intentions that we've been talking about over the past month - that there is a serious intention of a Chinese partner to negotiate and have a joint appearance in new projects, but at this point, there's no more serious intention from Chinese shipbuilders to purchase or enter into a strategic partnership with 3 Maj, more specifically with the Uljanik Group,'' Horvat stated, emphasising the fact that the Croatian Government will continue to try to find a way to make sure the shipyards honour their obligations.

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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 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.

ZAGREB, May 7, 2019 - The head of the Adriatic union, Boris Cerovac, on Monday told a press conference in Pula that workers at the Uljanik and 3. Maj docks whose accounts have been blocked and are not able to pay their bills can ask for a six-month moratorium on distress orders.

He informed that it is possible to delay the freezing of their accounts in line with an agreement reached between the Croatian association of payment agencies and the Blokirani civil society organisation representing citizens with blocked accounts and the union.

That will prevent a landslide of distress orders and blocked accounts, the president of the Blokirani NGO, Miriam Kervatin said, adding that if that were to occur not only would the lives of thousands of families be destroyed but "Pula and Istria would be smothered."

"The moratorium relates to all distress order that banks, teleoperators, credit card operators transferred to the payment agency," Kervatin explained.

Cerovac informed reporters of the situation at the Uljanik dock and that the IT sector was in receivership as of Thursday and all its workers were dismissed which will take effect after 30 days. "It is up to each worker to decide what they will do but as there is no bankruptcy fund, it would be wiser to register with the employment agency than to work those 30 days," he said.

He added that there is no one at the dock working in the payments section. In the personnel section, which is trying to resolve the issue of dismissal notices and other records there are no work safety measures, there is no IT and, as he said, "we are trying to come to an agreement with security guards so that at least there are some workers at the entrance to prevent the entry of unwanted persons or of material leaving the dock."

"The situation is alarming. If the Chinese are a serious partner, they will need time to find a solution yet workers have no more time. They are waiting for bankruptcy to be launched so they can at least achieve their minimum rights," Cerovac said, adding that he's afraid Uljanik is slowly being phased out.

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

ZAGREB, May 3, 2019 - The Pazin Commercial Court on Friday adjourned a hearing at which a decision was to have been made on whether conditions have been met to launch bankruptcy proceedings in the case of Uljanik d.d., the umbrella company of the shipbuilding group, and scheduled a new hearing for May 17.

Judge Damir Rabar accepted a proposal by Management Board chair Emil Bulić to wait for a final decision by a potential Chinese partner, which is expected to be made known in about ten days.

Trustee Damir Majstorović said that both conditions for launching bankruptcy proceedings in the case of Uljanik d.d. had been met – inability to make payments and overindebtedness.

Majstorović said that the company's debt now totalled 60 million kuna.

The court decision to adjourn the bankruptcy hearing was welcomed also by trade unions. The decision gives Uljanik d.d. as well as the Uljanik and 3. Maj shipyards another chance for restructuring despite the fact that conditions for bankruptcy have been met.

The hearing was held after a delegation of the China Shipbuilding Industry Corporation visited both shipyards and after a bankruptcy hearing for one of them was adjourned until May 13 due to possible involvement of the Chinese investor in the two shipyards.

Uljanik d.d. is a 100% owner of other companies in the Uljanik group, the exception being the 3. Maj dock, where it holds 87% of the stock.

More shipbuilding news can be found in the Business section.