ZAGREB, April 2, 2019 - The Uljanik shipbuilding group said on Monday that a client from Kuwait had cancelled a contract for the construction of a vessel for livestock transport but that it was willing to negotiate new contract terms and have Uljanik continue work on the vessel.

Livestock Transport & Trading Co. terminated the existing contract because the vessel could not be delivered in line with the terms defined by the current contract, said the shipyard, which has been in financial trouble for months.

It added that the client was willing to renegotiate the contract and that talks on that were under way.

Several other clients in 2018 and earlier this year terminated their contracts with Uljanik for the construction of ships.

The head of the shipyard's strike committee, Boris Cerovac, said in Pula on Monday workers were continuing with the strike, even though the Metalworkers' Union (SMH) decided to end it, while the Adriatic Union and the Istria, Kvarner and Dalmatia Union believe workers cannot return to work as they have not received seven monthly wages.

SMH shop steward Đino Šverko said the SMH formally no longer had a representative on the strike committee and that the Uljanik workers who were SMH members were also on strike and fully supported all committee decisions.

"Who's so naive to end the strike? We haven't been paid for seven months, the workers are hungry, nearly every international labour organisation convention is being breached. I ask once again that a decision on Uljanik be made as soon as possible," said Sverko.

More Uljanik news can be found in the Business section.

ZAGREB, April 1, 2019 - The head of the Uljanik shipyard's strike committee, Boris Cerovac, said in Pula on Monday workers were continuing with the strike, even though the Metalworkers' Union (SMH) decided to end it, while the Adriatic Union and the Istria, Kvarner and Dalmatia Union believe workers cannot return to work as they have not received seven monthly wages.

"We are continuing with the strike until our demands are met, which is the payment of wages for seven months," said Cerovac, who heads the Adriatic Union.

SMH shop steward Đino Šverko told Hina the SMH formally no longer had a representative on the strike committee and that the Uljanik workers who were SMH members were also on strike and fully supported all committee decisions.

"Who's so naive to end the strike? We haven't been paid for seven months, the workers are hungry, nearly every international labour organisation convention is being breached at Uljanik. I ask once again that a decision on Uljanik be made as soon as possible," said Šverko.

As for threats by the defence team of an Australian shipowner that they would sue Uljanik's management and the strike committee if they did not allow subcontractors to work on a polar cruise ship, Cerovac said the committee allowed all subcontractors to work since last Friday.

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

ZAGREB, March 30, 2019 - Prime Minister Andrej Plenković said on Saturday that Istrian Democratic Party (IDS) leader Boris Miletić's statement by that pushing Uljanik into bankruptcy the ruling HDZ party was trying to economically destabilise Istria.

"If the IDS wants to play the game of shifting responsibility, it should ask itself what it has done for Uljanik over the past 30 years and not the last 17 months," Plenković said on the margins of a meeting of the NATO Parliamentary Assembly's Standing Committee in Zagreb.

Last year the government made a change, "unlike the SDP-led governments, of which the IDS was a member and which issued guarantees for ships that were not built," said Plenković.

"We did the only right and possible thing, we gave rescue aid in line with guidelines from the European Commission and made it possible to start looking for a suitable restructuring partner," he said.

Asked about combat aircraft, Plenković said that Croatia was working on enhancing its air force's capabilities but he could not guarantee that new fighter jets would be bought by the end of his term in office.

Asked if the aircraft purchase would be agreed directly or a new tender would be advertised, he said that having more than one option would be responsible.

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

ZAGREB, March 29, 2019 - Istrian Democratic Party (IDS) leader Boris Miletić on Thursday criticised the government's decision not to endorse the proposed plan for restructuring the ailing Uljanik Group, and insisted that inaction by the Andrej Plenković cabinet was an attempt to destabilise Istria, which, Miletic says, is "the only Croatian region that has managed to resist the pernicious influence of the Croatian Democratic Union (HDZ)."

Miletić said in Pula that the government's indecisiveness and lack of action regarding the Uljanik Group "is an attempt to economically destabilise Istria."

He claimed that the government postponed the beginning of today's meeting, while waiting for a decision of the Rijeka-based Commercial Court on whether there were conditions for initiating bankruptcy proceedings for the Uljanik Group.

Social Democratic Party (SDP) leader Davor Bernardić today called for "halting the bankruptcy of Uljanik Group."

He accused the current HDZ-led government of having no idea on how to address the problems in the Uljanik and 3 Maj docks.

Another opposition politician, Ivan Sinčić of the Živi Zid party accused Prime Minister Plenković of being incapable of salvaging the national shipbuilding industry.

Commenting on the government's decision not to accept the proposed overhaul plan which might cause financial exposure, Plenković today recalled that in the period between 1992 and 2017 a total of 31.7 billion kuna was spent on bailing out the shipyards or in the form of state subsidies.

Of that amount 4.3 billion kuna went to the Pula-based Uljanik dock and 9 billion kuna was earmarked for the 3. Maj shipyard in Rijeka or a total of 13.3 billion kuna for the Uljanik Group. "That reflects the great solidarity of all Croatian citizens with the shipbuilding industry overall and in particular with Pula and Rijeka," Plenković underscored.

According to data he presented the state's total exposure to the Uljanik Group on 15 October 2018 amounted to 4.3 billion kuna and because the group could not settle its dues, contracts were cancelled and a total of 3.1 billion kuna was paid out of the state budget on March 11 for enforced state guarantees.

"All these payments were made with the consent and coordination of the State Prosecutor's Office. All those agreements were once again reviewed and endorsed. Once the state issues a guarantee of that kind, in this case guarantees for ships, there is no option than to settle those dues," the prime minister said.

He underscored that the government was working on the issue of Croatia's shipbuilding, it analyses the crisis in Uljanik and all the aspects involved - political, economic, financial, social, regional, structural.

The government is supposed to make a decision that is "responsible and defensible in all aspects," Plenković said.

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

At the start of the enfeebled Uljanik's bigger problems, the Croatian Government's view was either restructuring or bankruptcy, and now there's no time to devise any sort of new solution.

As Marija Brnic/Poslovni Dnevnik writes on the 28th of March, 2019, the government rejected the offer of strategic partner Brodosplit for Uljanik's restructuring, and thus, although the prime minister tried to avoid actually saying it, a process that would have a domino effect on all the companies operating within the Pula-based group system was launched.

The fact that there is no longer a strategic partner for Uljanik, which was the main argument for the postponement of the opening of bankruptcy proceedings in the previous proceedings on the 3 Maj shipyard and Uljanik's other companies, is changing the situation and it is now clear that no matter how much room the government initially left for some possible new solutions, the judge in Pazin doesn't have much of a choice today and will determine that the conditions for declaring bankruptcy for the Uljanik shipyard are now fulfilled. Such a decision automatically withdraws what the Rijeka court stated and opens bankruptcy proceedings for the 3 Maj shipyard.

All the speculations that there could be another possibility for Uljanik, for which Prime Minister Andrej Plenković left space in his statement, are empty stories, not only because of the fact that right at the very beginning of Uljanik's growing woes, the government's position was that the only possible scenarios for Uljanik's rescue were restructuring or bankruptcy, but also because of the fact that now, there is definitely no more time available to come up with a new solution for the burdened shipyard. When it comes to the question of the possibility of the continuation of shipbuilding in Pula and Rijeka as a whole, the key question remains the same - how many ships could buyers actually be found for, and then arrive other questions regarding financing through bankruptcy.

Two ships that are now in their final stages of construction in Pula were de facto detained over the past few days by the company's emotionally exhausted employees, and Uljanik's workers aren't finishing the job, because "other" workers, not from that shipyard, are working on Scenic's polar cruiser, while Jan de Nul is awaiting the government's decision to pay the requested difference of 22 million euros and to take over and finish it in Trieste, Italy.

From Pula, the request was for the completion of construction to be carried out in Uljanik, but the government didn't even discuss that yesterday, so it remains unknown as to whether the Ministry of Finance has worked to meet the necessary conditions, and if so, when it intends to pay any price differences and deal with the issue of the contracted vessels.

Although it's quite impossible to describe the situation surrounding Uljanik and Croatian shipbuilding as a whole as anything remotely positive, its rather lucky, analysts agree, that all of this happened and seems to have finally reached its peak in a year in which a surplus was recorded, but that doesn't minimise the issues Uljanik faces, nor does it even begin to confront the shipyard's overworked and well and truly underpaid employees.

The interesting thing which always happens in Croatia is the intertwining of business and politics. Just like with the messy Agrokor situation that has dominated the Croatian media for the past couple of years, there is always a political element, and if there isn't really one, someone will make you believe there is. The Istrian Democratic Party (IDS) has accused the Croatian Government of purposely trying to cause issues by using the Uljanik saga to its benefit, even claiming that the ''government's lack of action and indecisiveness'' is an attempt to destabilise Istria.

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

Click here for the original article by Marija Brnic for Poslovni Dnevnik

ZAGREB, March 28, 2019 - The proposed restructuring of the ailing Uljanik Group cannot be accepted by the government, as that plan would entail a huge exposure of the state to this problem, however, the government is open to the search of additional solutions for the shipyards in Pula and Rijeka, Prime Minister Andrej Plenković said in Zagreb on Thursday.

Plenković recalled that last week the Croatian public was informed about figures and restructuring costs from the plan, which should be covered by the state budget.

The proposal of the recently selected strategic partner Brodosplit and its owner Tomislav Debeljak, means that the aggregate costs could reach 10.8 billion kuna, and could not be lower than 7.5 billion kuna.

In that scenario, the Croatian state would be expected to provide profuse aid which would mean "great financial exposure", which would be definitely a huge burden on Croatian tax payers, the premier told his cabinet.

Therefore, the viability of the proposed restructuring plan is uncertain, the prime minister said.

Rijeka Commercial Court on Thursday once again adjourned a hearing that should have determined whether conditions have been fulfilled to open bankruptcy proceedings at the 3 Maj dock, and the next hearing is scheduled for April 17.

Judge Liljana Ugrin adjourned the hearing with the consent of workers' representatives and the shipyard's Supervisory Board, the Uljanik company and the temporary trustee for that Rijeka-based dock. "If the government in the meantime decides that it won't be bailing out 3 Maj, a hearing can be convened by phone and there is no need to wait for April 17," she said.

Receivership for the dock, which is part of the Uljanik Group, was sought last year by the Fina financial agency because of overdue liabilities for a period of more than 120 days which then amounted to 72 million kuna. In the meantime, that amount increased and on March 12 the debt had grown to 91 million kuna, 18.7 million kuna of which refers to workers' wages.

The first bankruptcy hearing was originally scheduled for February 6 but shifted to February 26, then to March 12 and again for March 28. The rationale for the adjournment then was the same again with an explanation one should wait for a possible agreement on the payment of wages and the continuation of production.

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

ZAGREB, March 28, 2019 - President Kolinda Grabar-Kitarović met with representatives from the Uljanik and 3. Maj shipyards on Wednesday at unions' request, and they informed her of their demands from the government - an urgent solution to their agony, the approval and payment of a loan for interim financing, the adoption of a draft restructuring plan on healthy foundations, and a possible strategic partner that will secure the best bid.

The president expressed her complete understanding for the workers' endeavours to have this unsustainable situation resolved and a decision on the fate of shipyards to be made as soon as possible, her office said in a press release.

She said the main criteria for the decision on whether to go into bankruptcy or to embark on restructuring should be based on the sustainability and competitiveness of shipbuilding as one of Croatia's traditional and strategic export-oriented industries.

She underscored the importance of caring for the livelihoods of workers and their families. She believes that only a sustainable business model can preserve jobs and secure wages for workers.

She finds it is disheartening that, according to the workers' representatives, even after 3.7 billion kuna of state funds was invested in Uljanik and 9 billion kuna in 3. Maj, the docks are in such a difficult state, which indicates that the way they were managed until now was a mistake.

President Grabar-Kitarović expects the money that has disappeared to be traced and repaid into the state budget and that all those responsible answer for it. She called on everyone involved in making a decision on the docks' fate to once again consider all the arguments so that they can be sure they will make the right decision.

She expressed concern about the impact of the situation on the economy, the livelihoods of part of the population of Istria and the Kvarner area, on emigration, and on the drain of a workforce which is in short supply.

The president of the strike committee at the Uljanik dock, Boris Cerovac, told reporters they told the president that they want the Uljanik and 3. Maj docks to survive and that they received full support from her. He underscored that she promised that she would inform the government of everything and ask it to do what is best for shipbuilding and for workers.

I hope for a positive solution, he said. "We can't wait any more."

"Rijeka Commercial Court is expected to decide tomorrow whether we are going into bankruptcy or not, and the only way for that not to occur is for the government to adopt a decision that 3. Maj and Uljanik will undergo restructuring and on a loan needed for interim financing," he said.

Another shop steward, Đino Šverko, believes that the president can help a lot because she is the only one, in addition to Economy Minister Darko Horvat, who has said that she supports restructuring and not bankruptcy and she reiterated that today, he underscored.

"She isn't the one who can make that decision but as a moral authority, she can talk with the prime minister and request that he resolves this agony as soon as possible," he added.

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

ZAGREB, March 27, 2019 - Prime Minister Andrej Plenković on Tuesday declined to comment on the arrests of former executives of the Uljanik shipbuilding group made earlier in the day or say if he preferred restructuring or bankruptcy for Uljanik, saying only that the topic would be discussed on Wednesday.

"As Prime Minister I do not want to comment on any proceedings... police and prosecutorial authorities have been working on the case for several months, I believe they are doing their job very thoroughly in a case that is not simple," he said in a brief comment on the arrests.

Local police and prosecutors on Tuesday morning started an operation in Istria, searching homes and business offices in an investigation covering 12 former executives of the ailing Uljanik shipbuilding group.

Asked about criticism from opposition SDP party leader Davor Bernardić as well as the opposition Živi Zid party that state institutions acted on his request and that the arrests had occurred in the week when the government was expected to make a decision on Uljanik's fate, Plenković asked "Is that the same gentleman who criticises the Chief State Prosecutor's Office for not doing anything?"

"He is unworthy of my comment," he added.

Plenković also would not say which solution for Uljanik he preferred – bankruptcy or restructuring, saying only: "We will have the last discussion on the matter tomorrow and you will be informed accordingly."

Anto Nobilo, who is defending a former president of the management board of the Uljanik shipbuilding group, Gianni Rossanda, said after his client was questioned by the police in Rijeka on Tuesday afternoon that Rossanda doesn't consider himself guilty and that he refused to make a statement to the police.

Nobilo said that he could not release any details of the questioning as the police investigation under way was confidential. Due to the complexity of the case, Rossanda refused to make a statement but once we've examined the file, we will start presenting our defence, Nobilo said.

Nobilo believes that the investigation which led to the arrests of 12 people earlier in the day has achieved a political goal, adding that this week the government will announce that the Uljanik group and its shipyards have to file for bankruptcy, thus launching the campaign for European elections.

Asked by reporters whether that meant that the government had ordered the USKOK anti-corruption office to launch the operation, Nobilo said that that was obvious.

He said that the police were lying when they spoke about HRK 1.2 billion having been embezzled but would not say if the amount in question was lower or higher.

Rossanda will remain in custody until Wednesday, when he will be questioned at the Rijeka County Prosecutor's Office.

Maksimilijan Percan, president of the management board of the 3. Maj shipyard, which is part of the Uljanik group, was also brought to the police station in Rijeka this afternoon for questioning.

Union leader Juraj Šoljić of the 3. Maj shipyard said on Tuesday that he supported activities launched by the police and other state institutions in order to determine where the money of that Rijeka-based dock as well as funds for its restructuring had ended up, and he called on the government to make decisions that would enable the continuation of production at the dock.

Anti-corruption investigators in Rijeka have been investigating for several months possible unlawful activities in the Uljanik shipbuilding group of which 3. Maj is part and in cooperation with the Rijeka County Prosecutor's Office early on Tuesday morning they launched an operation in which 12 people were arrested on suspicion of defrauding the Rijeka shipyard and the state budget.

Šoljić said that union representatives in the shipyard welcomed the operation and expected it to help determine where budget funds for the shipyard, intended for its restructuring, had ended up. "We have heard media reports saying that the leading people of the shipyard's former and current management have been arrested. Two years ago, I left the shipyard's supervisory board as the workers' representative exactly because of such indications and because I didn't agree with the way the dock was managed and supervised," said Šoljić.

He stressed that 3. Maj was sold to the Pula-based Uljanik in 2013 and that at the time it was financially rehabilitated, while its collapse, in terms of both personnel and finances, happened over the past five years.

"I call on the government to redress that injustice. It should adopt a decision as soon as possible enabling the payment of 3. Maj workers' wages, redressing of the injustice done to the dock and the continuation of the dock's operations, with the state as its owner, that is, either through CERP (Restructuring and Sale Centre) or the Jadranbrod shipbuilding corporation," said Šoljić.

Asked about the amount the shipyard and the state budget had been defrauded of, Šoljić said that the state had provided 847 million kuna for the restructuring of 3. Maj.

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

ZAGREB, March 26, 2019 - The Police Office for Suppression of Corruption and Organised Crime (PNUSKOK) on Tuesday morning started arresting former executive officers in the Uljanik Group, and according to unofficial information among those arrested are former management board president Gianni Rossanda, his predecessor Anton Brajković and members of the former management board Marinko Brgić and Veljko Grbac.

Earlier in the morning police raided the home of former management board president Anton Brajković, who was replaced by Gianni Rossanda in 2013.

Apart from Rossanda, the former Uljanik management board also included Marinko Brgić and Veljko Grbac. Two vehicles, assumed to belong to the Ministry of the Interior, were parked outside the building where Rossanda lives and the former Uljanik management board president was allegedly not at home.

"I believe that former executives and management board members are the targets of the criminal investigation. I noticed members of the riot police outside Uljanik this morning already. I did not at the time know what that was all about, but I am happy to hear that things have started happening...I hope that someone will be held accountable for the situation in the shipyard," the head of the striking committee, Boris Cerovac, told the press.

"Unfortunately, we are here because individuals in Uljanik did not do their jobs," Cerovac concluded.

According to information Hina obtained from the Interior Ministry earlier this morning, law enforcement and prosecutorial authorities were searching the homes and offices of 12 suspects covered by the operation in Istria County. Spokeswoman Marina Mandic said the 12 suspects "are believed to have been implicated in possible wrongdoing" during the restructuring of the shipyard in Rijeka.

Pula Mayor Boris Miletić and Istria County Prefect Valter Flego, both of the Istrian Democratic Party (IDS), said they were the first to call on the Chief Prosecutor's Office and other relevant state institutions to investigate absolutely every segment of Uljanik's business operations.

"We believe that it is exceptionally important, notably in the current uncertain circumstances in Uljanik, to remove every suspicion and establish the responsibility of all those that have brought Uljanik to the brink of disaster, including the inaction of the state," Miletić and Flego said in their joint press release.

They also said that today's police operation was the first time the state had reacted to Uljanik's business performance. “Unfortunately, this is a reaction and not a pro-active move of the state which could have probably prevented the situation that Uljanik is facing today," Miletić and Flego said.

Local opposition politician and Rijeka City councillor Hrvoje Burić said he was surprised the arrests had not taken place earlier. He supported the dock's workers, expressing confidence that after the bankruptcy, the shipbuilding industry wold continue to exist in Pula and Rijeka.

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

ZAGREB, March 22, 2019 - The situation at the ailing Uljanik shipbuilding group from Pula, whose workers on Thursday went on strike again, was calm on Friday, and the striking committee decided to send letters to the prime minister, the president and the parliament speaker and to the owners of a dredger and a polar discovery cruise ship that are being built at Uljanik, in yet another attempt to make the government finally make a decision on the shipyard's future.

"We have asked the prime minister to urgently hold a government conference call to make a decision on Uljanik. We have called on President Kolinda Grabar-Kitarović... to visit Uljanik and see for herself the workers' agony and on the parliament speaker to hold a parliamentary discussion on Uljanik and seek support for the shipyard," the head of the striking committee, Boris Cerovac, said.

He added that the striking committee had also written to Jan De Nul, owner of a dredger that was being built in the shipyard, to give up on its plan to take the vessel and have it completed somewhere else.

"We cannot accept that and believe that Uljanik workers are capable of completing the ship. It is a highly sophisticated vessel, the world's biggest dredger, and we are willing to complete it as soon as the government makes a decision that will be positive for us. We have also written to the Scenic group, owner of the polar discovery cruise ship, asking for patience. We are behind deadlines but workers cannot work if they are hungry," he said.

Cerovac stressed that decision-making on the shipyard's fate was taking too long, that workers were physically and mentally exhausted and they had lost dignity.

Union representatives said on Thursday that workers demanded that the government adopt a restructuring plan for Uljanik or obtain a loan to pay workers their wages which they haven't received for the past seven months.

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