ZAGREB, February 8, 2019 - The Minister of Economy, Entrepreneurship and Crafts, Darko Horvat, said on Thursday that good prospects existed for restructuring of Uljanik if the new strategic partner proved to be financially capable, otherwise serious problems would occur because there was no more time for salvaging shipbuilding in Rijeka and Pula.

The management and supervisory boards of the Uljanik shipbuilding group on Thursday selected the Brodograđevna Industrija Split, or Brodosplit, as the strategic partner and an agreement will be concluded to regulate mutual rights and obligations to as soon as possible draw up an acceptable and implementable restructuring programme for the Uljanik company and shipyard.

"If... we get clear indicators that, in addition to the strategic partner's wish to enter the restructuring phase, it shows that it is financially capable of it, I think that a chance exists," Horvat told reporters in Government House.

"If during the making of the restructuring programme it is established or we get clear information that the strategic partner doesn't have that financial ability, I'm afraid that we will have a serious problem because there is no time left to secure a new life for shipbuilding in Rijeka and Pula," Horvat warned.

He added that the strategic partners (Brodosplit & Fincantieri) claimed in their bid that they had the necessary financial ability for Uljanik's restructuring and submitted financial data showing that they are solvent companies.

Until such time that the strategic partner proves that it has that ability, "the strategic partnership is a potential with good wishes and very little possibilities."

Answering a reporter's question, Horvat said that the bid was submitted jointly by the Brodograđevna Industrija Split, owned by the DIV Group, and the Italian shipbuilder Fincantieri at a ratio of 70% to 30%.

He added that negotiations were underway with a client for a new ship for which the state has issued guarantees in the amount of 126 million euro. He warned that the state will have to pay that guarantee if the ship is not completed or if Uljanik goes bankrupt. That is why the state wants the ship to be built and estimates that that requires about 22 million euro.

"How that burden will be shared with the client is a matter of negotiation and I hope that in the next 10 days or so that will be completed. Whatever we invest in completing the ship will give us a chance to not only halve the 1.7 billion kuna Finance Minister Zdravko Marić is speaking about, but to save 1 billion kuna," Horvat said.

Asked whether he was satisfied with the choice of the strategic partner, Horvat said that he would refrain from making any subjective assessments and that he considered as relevant the financial reports about the status of Brodosplit and Fincantieri for 2016 and 2017 that were included in the bid. They show good business results, which offers hope that the strategic partners will use their know-how to reduce the huge deficit in the business accounts of the 3. Maj and Uljanik docks, said Horvat.

Asked whether Brodosplit used state money earmarked for restructuring in 2017 as intended, Horvat said that the ministry monitored Croatia's shipbuilding and that this information was available to the public on an annual basis.

"I'm certain that the management board carefully analysed all those reports over the past few days. Should there be any need for some other bodies to become involved in any analysis before the restructuring programme is adopted, similarly to the start of 2017, when we conducted an inspection of how funds and grants for Uljanik were expended, I think that there is no reason why we shouldn't be able to check the situation and status of the dock in Split as well," Horvat said.

He did not wish to specify how much Uljanik's bailout would cost taxpayers. He added that reports saying that the restructuring of the Rijeka and Pula docks could cost 1.2 billion didn't come from the ministry. I would like to ask those who presented that data, how they came to that figure and who their source was, he said.

Finance Minister Zdravko Marić did not want to comment on how much the restructuring of the Uljanik group could cost and repeated how much had been paid to date in enforced guarantees. "To date, we've paid 2.545 billion kuna in 2018 and payments have continued in 2019. In January an additional 250 million kuna was paid in enforced guarantees. We are approaching the amount of about 2.8 billion kuna, which is in line with our initial estimates at the time when the crisis broke out," Marić told reporters.

When reminded that he said that this year 1.5 billion kuna would be paid in state guarantees for Uljanik, Marić reiterated that his ministry estimated that a portion of that amount would very likely have to be paid.

He added that construction work on a big ship, which was also the most valuable vessel under construction, was nearing completion and that he hoped a solution for that ship would be found and that guarantees would not have to be paid for it.

Marić did not wish to comment on speculation that the strategic partners estimated that the state would have to contribute to Uljanik's bailout with about 10 billion kuna. He also didn't want to comment on previous statements by Minister Horvat that Uljanik's restructuring would cost about 800 million euro and that the state would have to pay half of that.

He reiterated though that he had always advocated that the integrity of state guarantees had to be secured and that if the state issued a guarantee, it had to settle its obligations and pay guarantees. On the other hand, I have said many times that the question should be asked why so many guarantees have been issued and how, he said.

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

ZAGREB, February 7, 2019 - Brodograđevna Industrija Split, or Brodosplit, has been selected as the strategic partner for the ailing Pula-based Uljanik shipyard, Uljanik announced in a statement via the Zagreb Stock Exchange on Thursday.

The decision was made at a joint meeting of the Pula shipyard's management and supervisory boards on Thursday.

An agreement will be concluded with the selected strategic partner to regulate mutual rights and obligations. Under the agreement, the strategic partner will be required to draw up an acceptable and implementable restructuring programme for the Uljanik company and shipyard, the statement said.

The selected strategic partner will be allowed to enter the ownership structure of the Uljanik company through recapitalisation, as decided by the General Assembly, it added.

On December 21, the Pula-based terminated the strategic partnership with Kermas Energija and initiated a procedure for the selection of a new strategic partner.

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

ZAGREB, January 29, 2019 - The President of the Brodosplit shipyard Management Board, Tomislav Debeljak, said on Monday that following due diligence, his DIV company and its partners had submitted a bid for the restructure of the Uljanik Group and underlined that his company had references in the form of equity of 1.7 billion kuna and a debt of 296 million kuna.

"We conducted due diligence in Uljanik and submitted a bid for the restructuring programme," Debeljak told reporters at the Brodosplit dock where the start of construction of a polar cruise ship was launched, for the Quark Expeditions company which is part of the Travelopia Group.

Debeljak told reporters that he could not disclose the financial details of the bid however he underlined that DIV had a partnership with the Italian Fincantieri Group and "large and respectable banks who have sent letters of intent."

"As far as we are concerned as a company, the DIV Group has an equity of 1.7 billion kuna and a debt of just 296 million kuna. That means that our debt is far less than that of some large, quality companies and even some insurance companies. We have a truly good financial position," he said.

He added that the Brodosplit dock has shown that shipbuilding in Croatia can be positive and of good quality. He added that Brodosplit is currently preparing a study that will show what positive shipbuilding means and what negative shipbuilding is, adding that for the past three years, the Split-based dock has had positive business results.

"We have shown that we have references in the examples of the defunct Tvik company in Knin, the defunct Švrljiga factory in Serbia that we bought and, let's say the once defunct Brodosplit whose equity was deeply in the red and have shown what we can and intend to do in Uljanik or anywhere else in some other shipyard in Europe. We have the will, know-how, desire and management capacities to expand," Debeljak concluded.

In other Uljanik related news, deputy leader of the Adriatic Union, Boris Cerovac, said on Monday that news that the Commercial Court had received an application from the FINA financial agency requesting bankruptcy proceedings against the Uljanik shipyard joint-stock company was to be expected.

FINA notes that as of 21 January the Uljanik shipyard has unsettled payments that are more than 120 days overdue and amount to a total of 75.8 million kuna.

"That was absolutely to be expected because we knew that January 21 was the 120th day that the company's accounts were blocked," Cerovac told HINA. He expects the pre-bankruptcy trustee to determine the true situation and that it isn't necessary to launch bankruptcy proceedings if the restructuring programme proposed by a new strategic partner will "hold water."

FINA notes that Uljanik has 1,400 employees and about twenty accounts and term deposits in five commercial banks and that FINA has other information concerning the company's assets. The news of the bankruptcy proceedings comes after Uljanik's management board reported that a client from Luxembourg, CLdN, had unilaterally withdrawn from a contract for the construction of a ship.

Prior to that Uljanik has unilaterally cancelled a contract for another client and the latest cancellation is just another in this crisis situation in Uljanik.

Cerovac added that the union doesn't have any official information concerning a potential strategic partner and who has submitted bids for the company.

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

ZAGREB, January 28, 2019 - The CEO of the Uljanik shipyard, Emil Bulić, and the Minister of Economy, Darko Horvat, on Monday confirmed receipt of offers for the Uljanik Group, but did not specify their number or the names of potential strategic partners, saying that the bids were being evaluated.

"We will be able to discuss the bids more specifically after the completion of talks with the bidders," Bulić told the press at the Ministry of Economy, adding that consultations were under way with the Supervisory Board, representatives of the Ministry and social partners.

Asked how many offers had been submitted, Bulić said that their number was irrelevant. "Talks are in progress, and that is very sensitive information," he said, adding that the number of the bids would be revealed after their evaluation in the coming days.

Bulić expressed hope that the offers would be evaluated this week, but noted that the process would last until a consensus was reached.

Asked about the selection criteria, Bulić said that these were sustainable shipbuilding at the 3. Maj shipyard in Rijeka and the Uljanik shipyard in Pula, and the provision of liquidity for the functioning of the system.

Minister Horvat announced talks with all interested parties for Tuesday, adding that Uljanik's management would be given the next few days to analyse the offers and inform the Ministries of Finance and Economy about their details. "The final decision rests on the management," he said.

Earlier in the day, the Uljanik management reported via the Zagreb Stock Exchange it had received offers from interested potential investors, without specifying how many and from whom.

The management recalled that due diligence had been conducted at the company from December 27 to January 24, and that the deadline for the submission of bids had expired at 8pm on January 25.

The management continues the process of selecting a strategic partner. Together with the supervisory board, it is considering the offers and is in consultation with potential investors, social partners and state institutions involved in the restructuring process, it said in a statement.

Unofficial sources said on Sunday that apart from the Italian shipbuilding group Fincantieri, Australia's Scenic Group and the Maritime Institute of Split were also interested as potential strategic investors.

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

ZAGREB, January 27, 2019 - Representatives of trade unions active in the Pula-based Uljanik shipbuilding group said on Saturday that their two-hour meeting with the shipyard's management and the manager of the Brodosplit shipbuilding company, Tomislav Debeljak, had ended without any concrete results, repeating that unions wanted Uljanik to continue with shipbuilding activity and keep as many workers as possible.

"We still don't have information on the potential investors that have given bids for the takeover, so we can only make guesses or accept information published by some media outlets," unionist Boris Cerovac told Hina.

Cerovac added that unions did not want to favour any of the potential investors and wanted to talk to every investor that was interested in taking over Uljanik. "It is important to us - and we have made that clear to Mr Debeljak - that shipbuilding is maintained instead of launching real estate business, and we want the investor to keep as many workers as possible. We want to ensure that with a social agreement and expect the potential partner to accept it," said Cerovac.

The management of the Pula shipbuilding group on Saturday continued analysing bids submitted for the takeover of the shipyard, and after meeting with Debeljak and unionists, the management met with the directors of all companies making up the Uljanik Group.

According to unofficial sources, apart from Brodosplit, which has submitted a bid for Uljanik's takeover in partnership with Italy's Fincantieri, offers have also been submitted by the Scenic group from Australia and the Maritime Institute from Split.

Uljanik CEO Emil Bulić said on Friday that a total of six companies had done an in-depth analysis of the shipyard's operations.

The deadline for the submission of binding offers for Uljanik's takeover expired at 8 pm on Friday.

The shipyard's management is expected to present the bids to Economy Minister Darko Horvat on Monday.

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

ZAGREB, January 26, 2019 - Brodosplit, in partnership with Italy's Fincantieri Group, has made an offer for the restructuring of the ailing Uljanik shipbuilding group, the Split-based shipyard announced on Friday evening.

"We can confirm that Brodosplit, in partnership with the Fincantieri Group, today submitted a bid for the restructuring of the Uljanik Group," Brodosplit said in a brief statement.

The company said it could not discuss details of the offer before it was examined by the management of the Uljanik Group and relevant state institutions. Brodosplit has earlier signed several cooperation agreements with the Italian group.

The CEO of the Pula shipyard, Emil Bulić, said earlier on Friday that six companies had conducted due diligence at the shipyard, based in the northern Adriatic city of Pula. The process was completed at 6pm and the deadline for the submission of a binding offer expired at 8pm on Friday.

Uljanik's management are expected to present the offers to Economy Minister Darko Horvat on Monday.

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

ZAGREB, January 25 (Hina) - The Uljanik Group Board chair, Emil Bulić, said on Friday afternoon that a total of six companies visited the group's data room which was opened for due diligence until 24 January, and a deadline for their prospective bids expires on Friday evening.

Upon the expiry of the deadline for submission of bids for a strategic partnership on 8pm it will be known which of the interested companies have offered their bids, Bulić said.

He said that based on the current developments and bids received, he did not want to give any false hope. Let us wait until 8 pm to see how serious these bids are, he said.

Asked whether the access to the data room was denied to a previous strategic partner, businessman Danko Končar, Bulić said that no one was denied access.

The supervisory board is due to convene on Friday evening and it is supposed to consider the bids in the coming days.

It is up to the management and the supervisory board to select the future partner, and the communication with the economy ministry is intensive.

Bulić said that they would insist that the Pula-based Uljanik dock and the Rijeka-based 3. Maj dock should remain together in the package offered to strategic partners.

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

ZAGREB, January 23, 2019 - Economy Minister Darko Horvat said before a cabinet meeting on Wednesday that the government expected at least two offers from strategic partners for the Uljanik Group by Friday.

"Friday will be the day during which we will receive at least two offers. How serious these offers will be... We will give the opportunity to the management to open and analyse the offers on Saturday and present them to the Economy Ministry at 11 am Monday," Horvat said, adding that a meeting with unionists and the management would be held at the ministry on Tuesday.

Asked if that meant that by the end of next week the public would know the name of the new owner of the Uljanik Group, Horvat said no. "I expect the text of these offers to be very complicated. The management will most definitely need time to analyse them," he added.

He also said the government had not set up a deadline, adding that the public would be updated by the management on Friday or Saturday.

Horvat said investors were interested in Croatia's shipbuilding industry, but declined to talk details.

Due to great interest from potential investors, the deadline for due diligence in the Uljanik dock has been extended from January 18 to January 24, while the deadline for the submission of strategic partnership bids remained unchanged -- 2000 hrs, January 25.

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

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

ZAGREB, January 18, 2019 - The Uljanik Group's board chairman Emil Bulić told the press on Thursday that the reason for the prolongation of an in-depth analysis of the Pula-based shipyard until January 24 was the great interest shown by potential investors.

The Uljanik shipyard said today that the due diligence period had been extended until January 24 following additional interest shown by potential investors.

"Data room can be accessed on a working day from 0800-1800 hrs and also on Saturday 19th January 2019 from 0900-1300 hrs. Deadline for submitting the Offers for strategic partnership remains unchanged i.e. by 25th January 2019 until 2000 hrs (CET)," reads a press release issued by the group on the Zagreb Stock Exchange (ZSE).

Economy Minister Darko Horvat said last week that intensive talks were under way with several partners and that it would be clear by January 25 whether they would eventually make a financial offer. He added then that "two serious partners" were conducting due diligence.

When asked by the press to identify the potential investors, Bulić said today that he could not give a more specific answer, citing confidentiality.

Due to the sensitivity of the whole process, all interested parties who visited the data room signed a confidentiality statement.

Bulić said that representatives of five potential investors had to date entered the data room of the Uljanik Group that includes the shipyard in Pula and one more dock, 3.Maj in Rijeka. He declined to comment on local media speculations that executives of a large Chinese shipyard and several small docks in Germany were among those possible investors.

"Croatia's largest shipbuilder Uljanik, which is trying to attract investors to stay afloat, extended a due diligence process until late next week after drawing the interest of potential strategic partners," Reuters reported today.

"Local media reported that there were potential investors from Ukraine, Italy, Germany, China and Australia for Uljanik, which is 25 percent state-owned," according to Reuters.

The news agency says that the Uljanik Group "has been on the brink of bankruptcy after facing liquidity problems over the past 12 months, which led to two strikes by its workers in the second half of last year over unpaid wages."

In January last year, the Croatian government helped it stay afloat with state guarantees for a loan worth 96 million euro (111 million dollars), while previous governments guaranteed other loans extended to Uljanik, which is now putting pressure on public finances. Under European Union state aid rules, no further state guarantees or direct payments from the budget are allowed, Reuters says.

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