Court Postpones Bankruptcy Ruling for Croatia Yard

Maritime Activity Reports, Inc.

April 24, 2019

A court in Croatia on Wednesday postponed a bankruptcy ruling for the country's biggest shipbuilding group Uljanik until May 13, as the government tried to delay activation of state guarantees to a customer for late delivery of a vessel.

The commercial court in the northwestern town of Pazin had already delayed its ruling from March and the decision in May should be final. Bankruptcy would threaten the jobs of around 3,000 workers.

Uljanik, which owns two shipyards in the northern Adriatic cities of Pula and Rijeka and is 25 percent owned by the state, has been working to stave off bankruptcy due to liquidity problems that began in 2017.

The government has said it will not back a restructuring plan due to the financial burden on the state and doubts the proposal could turn the company's fortunes around.

Last week, a Luxembourg-based company requested the activation of the state guarantees worth 1 billion kuna ($151 million) after an order was not delivered in the agreed time.

Economy Minister Damir Horvat said on Wednesday the government was negotiating with the customer to complete the ship at another yard and accused Uljanik management and workers of being responsible for the delays.

"We want to save 130 million euros in state guarantees," Horvat told the parliament. "We are continuing talks with the ship owner ... extending assurances the ship will be completed in another shipyard."

The deadline for activation of the guarantees is Friday.

Horvat said the government has already paid out 3.2 billion kuna on the basis of state guarantees extended in previous years to help Uljanik stay afloat.

China pledged last month to increase trade with Central European countries and provide more financial support for major cross border infrastructure projects, with Premier Li Keqiang saying a Chinese delegation would look at Uljanik soon.

Meanwhile, local media have reported that around 1,800 employees have left the company in the last year.

Reporting by Daria Sito-Sucic

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