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.

ZAGREB, February 28, 2019 - The government will make a rational decision about the Uljanik shipbuilding group that will be responsible toward its employees, shipbuilding and taxpayers, a decision that will be in accordance with the guidelines for state subsidies to shipbuilding at the European level and realistic agreements with the strategic partner and management, Prime Minister Andrej Plenković said on Wednesday.

"We will make a decision that will be rational, responsible toward shipbuilding, toward employees, responsible toward the tradition that Croatia has in the industrial sense toward shipbuilding, but also responsible toward taxpayers and in accordance with what is realistic, in accordance with the guidelines that exist for state subsidies in the domain of shipbuilding at the European level and realistic agreements with the strategic partner and management," Plenković said responding to reporters on the margins of a meeting with the ambassadors of EU member states on the occasion of Romania taking on the chairmanship of the Council of the European Union.

Asked whether the decision about Uljanik had been made, the prime minister said that serious talks were being held between the Economy Ministry and the Finance Ministry, and that last week consultations were held with the European Commission.

He underscored that a solution was being sought for the ships that are currently being built to reduce the state's exposure due to state guarantees.

The prime minister recalled that the government had the financial strength in December last year and January this year to pay out 2.8 billion kuna in state guarantees for Uljanik. "That shows that we are consolidated and that is why the next steps that concern shipbuilding in general and Uljanik will be taken carefully by the government," he said.

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

ZAGREB, February 27, 2019 - Brodosplit's offer of strategic partnership to the Uljanik shipbuilding group contains all the necessary guarantees, the shipyard said on Tuesday after Economy Minister Darko Horvat said the strategic partner must provide clear guarantees that it was willing to finance Uljanik's restructuring.

"The answers to all the questions, including those asked today, are in our offer which... was accepted because it contains the necessary guarantees for everything we offered," Brodosplit said.

The dock said it had expressed willingness to ensure, with appropriate collateral, in the period until the restructuring programme is approved, part of the funds necessary, to complete the ships under construction, which would relieve the state.

"Not only that. With our professional approach, we opened all the doors in Brussels to a positive restructuring and the payment of the unpaid workers' wages. We did all that voluntarily, just so that we can assist the workers, Croatian shipbuilding and the state," Brodosplit said.

"Our offer, which contains all those answers, is still valid, although its expiration date is near and, as we said in the offer, after the other stakeholders do what is necessary, we are willing to immediately launch and do all that we offered," it added.

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

ZAGREB, February 26, 2019 - A hearing in the process of determining preconditions to launch bankruptcy proceedings at the 3. Maj shipyard that was scheduled for Tuesday at Rijeka Commercial Court, was adjourned until March 12, when it should be known whether workers at the dock will receive their unpaid wages, otherwise bankruptcy seems inevitable.

If by March 12, the question of workers' wages isn't settled, then bankruptcy is likely. If it is resolved by then, there is some room for a solution, Judge Liljana Ugrin said.

According to the court, the dock's account has been blocked due to a debt of 87 million kuna, yet yesterday for example that blockade amounted to HRK 76 million. Workers are seeking 11.9 million kuna for their overdue wages, suppliers are demanding 46 million kuna and the state's receivables amount to 21 million kuna, but the situation regarding those amounts is changing day in and day out.

Workers' representatives and Uljanik's management agreed to the adjournment as did representatives of the Strojopromet company which in fact lodged the request for bankruptcy proceedings along with the FINA financial agency.

The Rijeka-based dock is part of the ailing Uljanik Group in Pula.

Responding to reporters outside Government House earlier on Tuesday, Economy Minister Darko Horvat said that he cannot foretell the court's decisions however the government is trying to provide the relevant information in order to give a little more room so that bankruptcy proceedings can be deferred for a few days or weeks, he said.

He added that negotiations are underway with a client, the Jan De Nul Group and Brodosplit's owner, Tomislav Debeljak, as Uljanik's strategic partner and that he is convinced that in the next few days, he will make an appropriate decision and present a restructuring plan however "clear guarantees are necessary to verify that the strategic partner is currently financially prepared to follow the restructuring process."

"At the moment the key is - does the strategic partner have that ability. This is exactly the same question we asked the former strategic partner. If that verification is clear then that will be good news, if not, then I'm afraid there is no help," said Horvat.

Asked whether the strategic partner has been set a deadline to prove its financial capacities, Horvat said that the strategic partner was asked a few days ago about the matter.

I'm certain that this week is enough time for the strategic partner to clearly define whether he want to and can, after that the state will react, the minister said.

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

ZAGREB, February 19, 2019 - The European Commission has nothing against the government and the strategic partner participating 50:50 in the interim financing of the Uljanik shipbuilding group until a restructuring programme is drawn up, Croatian Economy Minister Darko Horvat said on Monday.

"The European Commission does not explicitly ban interim financing but still insists that it be 50:50. This interim financing would be part of the restructuring programme and will be part of the total volume once it is adopted," Horvat told Croatian reporters after a meeting at the Commission.

He estimates that 600 million kuna is necessary to revive the Uljanik and 3. Maj docks, which would include unfreezing their bank accounts, completing the ships under construction, and the payment of three overdue salaries.

About 107 million kuna is necessary to unfreeze 3. Maj's account, 65-68 million kuna to unfreeze Uljanik's account, 100 million kuna for overdue salaries, and 300 million kuna for completing four ships.

Horvat said a decision on how to find the 600 million kuna would be adopted in the next few days.

On Sunday, a meeting was held with Luxembourg's JDN group, which commissioned one of the ships for which the government issued a 124 million guarantee. At the end of January, the group cancelled its contract with Uljanik because the dock could not deliver the ship as agreed. About 30 million euro is necessary to finish the ship. If finished, the state guarantee would not be enforced.

Horvat said a memorandum of understanding would be hammered out over the next three weeks with JDN. Under the memorandum, JDN would provide 8 million euro, while the Uljanik Group, its strategic partner and the government would put up 22 million euro.

He said that after last Sunday's meeting, JDN decided the ship would stay at the Uljanik dock in Pula to be finished.

Asked if the government could take part in the financing without the European Commission's permission, he said they were told at today's meeting that "any damage reduction would be considered a positive effort made by the Croatian government". "We have no other option but to come up with a financing model together with the client," he added.

"We realise now that the European Commission will not have a rigorous position, that Croatia, if it can, has the right to reduce the damage to the national budget. We know how much it would be if we did nothing. It's very pragmatic and justified businesswise to invest 120 or 130 million kuna to salvage 970 million kuna," said Horvat.

As for an overhaul programme, which Uljanik's management must come up with together with the strategic partner, he said it would be ready in about a month, after which the Commission would need three to five months to analyse it.

Asked how long the government would finance shipyards with taxpayers' money, Horvat said these were old projects for which guarantees were not given by the incumbent government.

"This government has said it very clearly - enough. These aren't new projects, this is dealing with the situation that was encountered and problems left by some past governments. As a responsible government, we must pay all the guarantees given by past governments," he added.

The meeting in Brussels was also attended by Tomislav Debeljak, owner of the Brodosplit dock, which Uljanik's management selected as the group's strategic partner.

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

ZAGREB, February 18, 2019 - Croatian Economy Minister Darko Horvat said in Brussels on Monday that talks would be held with European Commission officials to discuss the situation in the ailing Uljanik shipbuilding group, after which more would be known as to whether and how much the Croatian state may become involved in dealing with the crisis in the Pula-based group.

Horvat was attending a meeting of the Competitiveness Council and his assistant Zvonimir Novak was heading a delegation that would discuss Uljanik with EC officials.

"I expect talks with the EC on the possibility of bridging over the period from today to the day when the shipyard's restructuring programme is to be verified," said Horvat.

Horvat said that a meeting with the Luxembourg-based JDN group, which had commissioned a 124 million euro self-propelled dredger from Uljanik, was held on Sunday.

In late January, the client terminated the contract for the construction of the vessel because Uljanik was unable to deliver it in line with the contract.

Horvat said that he had good news and that after the Monday meeting it was decided that the vessel would stay and most probably be completed in the Pula shipyard.

According to unofficial information carried by Croatian media, the Economy Ministry plans to put forward a proposal to the EC under which the ministry would, on its own or together with JDN, finance the completion of the vessel to prevent a situation in which the Croatian state would have to pay guarantees worth billions of kuna.

Several more vessels are at the initial stage of construction in the Pula shipyard and the state has also issued guarantees for them. Attempts will be made to obtain permission to have those vessels, too, completed by Uljanik so as to prevent the activation of guarantees.

According to media reports, the Croatian delegation will try to obtain permission from the EC for the Croatian state to become involved in unblocking the account of the 3. Maj and Uljanik, the two shipyards making up the Uljanik group, and the selected strategic partner is also expected to become involved.

Earlier this month, the Uljanik group's management and supervisory boards chose Brodograđevna Industrija Split and Italy's Fincantieri as a strategic partner for the company's restructuring.

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

ZAGREB, February 13, 2019 - Economy Minister Darko Horvat said on Tuesday that at the moment the government did not have a final decision as to whether Uljanik shipyard would go bankrupt or be bailed out, and described figures that are being mentioned in the media as the government's cost to restructure Uljanik as unverified.

Asked what costs of Uljanik's restructure the state would consider realistic and acceptable, Horvat said that he would not bother to explain the figure of 10 billion kuna being mentioned in the media.

He recalled that so far the state had issued and paid guarantees in the amount of 2.86 billion kuna and that a further 1.7 billion kuna was "hanging in the air if we don't complete the four ships that are at a high stage of being equipped."

According to Horvat, one of those ships currently requires 22 million euro.

If we invest in the completion of that ship, that would release the state from the obligation of paying 126 million euro in guarantees. As far as guarantees are concerned, the situation with the other three ships is somewhat easier and an additional 700 million kuna in guarantees is required, Horvat said.

Asked how negotiations with creditors were going regarding the unblocking of the 3. Maj dock's account, which, if not unblocked, will lead to the dock's bankruptcy, Horvat said that the shipyard's management was currently meeting with his assistant Zvonimir Novak and that one of the topics at that technical meeting was the unblocking of the account.

"Unblocking the account of the Rijeka-based shipyard requires about 107 million kuna while the account of the Pula dock (Uljanik) requires an additional 86 million kuna to be unblocked," Horvat said.

He announced that a team of representatives of the economy and finance ministries, Uljanik's management board and the selected strategic partner would go to Brussels to meet with officials of the European Commission and discuss "interim financing that would possibly include the strategic partner."

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

ZAGREB, February 11, 2019 - The recently chosen strategic partner for the restructuring of the Pula-based Uljanik shipbuilding group, a consortium consisting of the Croatian company DIV and Italy's Fincantieri, on Monday signed a letter of intent with the Australian Scenic group on cooperation in the construction of ultra-luxury cruise ships, the Pula dock said.

Uljanik's management and supervisory board on February 7 chose Brodograđevna Industrija Split, which is part of the DIV group, and Italy's Fincantieri as its strategic partner for the restructuring of that ailing shipbuilding group.

The letter of intent refers to cooperation on a project whereby Scenic wants to expand its fleet of revolutionary discovery yachts.

Scenic President Glen Moroney said that he believed the shipyard's financial challenges of the past 18 months would end now and that the shipyard would be able to focus on completing the Scenic Eclipse vessel.

He added that construction work on the Scenic Eclipse 2 would start as soon as the restructuring programme for Uljanik was approved, noting that detailed work had already started on designing an entirely new series of discovery vessels, consisting of several ultra-luxury cruise ships, to be built for the Scenic group, the shipyard said.

The shipyard's CEO Emil Bulić said that Scenic's decision to have the Scenic Eclipse completed by Uljanik, despite the fact that Uljanik was going through the most difficult period in its long history, was of great importance for the survival of the shipyard and the continuation of its business processes.

The Scenic group was one of the companies that submitted a bid for strategic partnership in the restructuring of Uljanik.

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

ZAGREB, February 9, 2019 - Brodosplit management board chairman Tomislav Debeljak said on Saturday that at the moment it was important to ensure a financial injection for the Uljanik shipbuilding group and that a possible folding of the Uljanik and 3. Maj docks would mean the end of shipbuilding as a strategic industry in Croatia.

Speaking to Hina, he said the injection was necessary "to drastically cut the total expenses" and that it was also important "to reach a quick agreement between everyone involved so as to ensure all the conditions for recapitalisation."

Earlier this week the Brodosplit dock was selected as a strategic partner for the Uljanik Group.

Debeljak said he did not expect any problems with the unions active in Uljanik. "If we reach an agreement, we will have to urgently draw up and agree a restructuring plan and forward it to the European Commission for approval."

He said the Commission had approved a restructuring plan for Brodosplit at once and that he did not expect any delays with the one for Uljanik. He added that Brodosplit was "not interested in the real estate business", only in shipbuilding. "We would do the same thing we did in Brodosplit, which is efficient business on the world shipbuilding market and generating profit without state aid."

Debeljak said that if Uljanik and 3. Maj were to fold, the consequences for shipbuilding in Croatia would be grave, including for Brodosplit, at a time when the market had improved.

He said he wanted Croatia's shipbuilding to be strong, competitive and profitable, recalling that in 163 years Uljanik and 3. Maj had built all types of ships, delivering them worldwide. He said salvaging the two docks was important for keeping jobs as well as for progress in technology, education and science.

Asked about the impact of Brodosplit's engagement in the Uljanik Group, Debeljak said Croatia would have three large shipyards instead of one, "which would operate successfully and profitably, improving the balance of industrial production and exports without state aid."

He said Croatian shipyards could compete in the construction of passenger ships, and recalled that Brodosplit was building polar expedition cruise vessels for the Dutch company Oceanwide Expeditions and the US company Quark Expeditions.

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

ZAGREB, February 9, 2019 - Parliament Speaker Gordan Jandroković said on Friday that he hoped that negotiations between the government, DIV owner Tomislav Debeljak and partners will result in a solution that will salvage and secure long-term sustainability of the Uljanik and 3. Maj shipyards and competitiveness on the international market.

"The government and the responsible ministry have invested a lot of effort for that process to head in a positive direction. Unfortunately, the shipyards have been generating huge losses for decades. We are talking about tens of billions that went into subsidies which in the end didn't prove to be good. Now Debeljak's DIV, together with Fincantieri as a partner, has come forward in an attempt to pull Uljanik and 3. Maj out of crisis," Jandroković told reporters.

We would all like a solution to be found that will secure long-term sustainability of the shipyards, competitiveness on the international market, so that they no longer generate losses and that, apart from the guarantees that the state took on in the past period, there are no more costs for our taxpayers, Jandroković said.

He described as absolutely understandable Debeljak's stance that he isn't prepared to financially settle what happened previously, but invest in what will be in the future. "He can't be responsible for what occurred previously. The state issued guarantees and stands behind them and has to cover them, but the final arrangement will be negotiated. It is normal that Debeljak and his partners are giving their private money and will see to every kuna, which is a logical demand of his, but the state will protect its interests too," Jandroković said.

It is obvious that interest in Croatian shipyards exists as several interested companies have come forward that see prospects in them. Therefore, there is reason for optimism and I hope that these expectations are realistic, Jandroković said.

He underscored that it wasn't realistic for taxpayers to pay for the cost of restructuring, amounting to 10 billion kuna. "Taxpayers have taken on significant obligations through state guarantees over the past 20 years and let's leave the final outcome of the negotiations to the relevant minister, shipyards' managements and potential strategic partners," he added.

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