State to Pay Additional 500 Million Kuna in Guarantees for Uljanik over Jan de Nul Dredger Building Dispute

Article Image
Source: Finance Ministry

Posted April 25, 2019

ZAGREB, April 24, 2019 - Finance Minister Zdravko Maric told Croatian Radio that over the next few weeks the state will pay between 400 and 500 million kuna to cover the enforced guarantee for the Pula-based Uljanik shipyard, adding that the government would do everything so that the company that commissioned the construction of a dredger from Uljanik shipyard does not demand the repayment of all advance payments.

The Dredging and Maritime Management company, owned by the Jan De Nul group, is demanding the repayment of all advance payments for the construction of a dredger by Uljanik plus interest, with government collateral having been given for a part of the advance payments.

Asked whether there was hope for Uljanik and 3. Maj docks, given that the Belgian contractor was asking for its advance payment back and how much of a burden would the repayment be for the state budget, Mari? said that the state was originally exposed towards the capital amount of Uljanik's loans in the amount of 4.3 billion kuna, and together with plus interest rates that amounts comes to 4.5 billion kuna.

"Most of it has been paid, some of it was paid in 2018 and the rest at the start of 2019, namely all together 3.1 billion kuna," Mari? said adding that before the Belgian client's dredger there were other enforced guarantees so the state would need to pay between 400 and 500 million kuna over the next several weeks.

Asked to comment on Eurostat reports according which Croatia recorded a 0.2% government surplus in 2018, Mari? said this was proof of the stability of public finances.

"The figures about Croatia released on Tuesday is another great recognition in international and domestic circles and the confirmation that public finances are stable, namely consolidated. This is the third year in a row that the public debt is going down and Croatia's consolidated gross debt was 74.6% of GDP," the minister said.

A hearing before the Commercial Court in Pazin which was expected to discuss preconditions for opening bankruptcy proceedings for the Uljanik shipyard was once again postponed on Wednesday and rescheduled for May 13.

Judge Ivan Duji? said the 60-day legal deadline for the postponed had expired, but that there were other legal grounds so he allowed another postponement. The judge said he would declare bankruptcy if Uljanik's accounts are not unblocked by May 13.

The proposal to launch bankruptcy proceedings at Uljanik was made in late January by the financial agency FINA, which said at the time that on January 21 the dock had overdue liabilities in the amount of 75.9 million kuna which it had not been able to pay for a period of more than 120 days. The Uljanik shipyard has 1,400 employees.

Uljanik said on Tuesday that the Dredging and Maritime Management company, owned by the Jan De Nul group, is demanding the repayment of all advance payments for the construction of a dredger by the Pula-based Uljanik shipyard plus interest, with government collateral having been given for a part of the advance payments.

Economy Minister Darko Horvat said on Tuesday that the negotiations with the company that commissioned the construction of a dredger from Uljanik were still under way and added that claims that the government would soon have to cover the enforced guarantee in the amount of half a billion kuna for that job were irresponsible and dangerous.

Horvat recalled that on 30 April and on 1 and 2 May, executives of the biggest Chinese shipbuilding company would tour the 3. Maj and Uljanik docks to see what can be done about their possible engagement or cooperation.

Source: total-croatia-news.com