Posted on August 30, 2023
Croatia’s Uljanik shipyard failed to attract bidders in the third attempt by the creditors’ group to sell their position in the financially troubled shipyard. Once one of the largest shipbuilders in Croatia, the yard fell on hard times and was initially forced into bankruptcy in 2019 before winning a partial bailout from the government, which remains the company’s largest creditor.
Bidding closed last week in the latest round of the tender process with the creditors group offering their entire stake which represents 54.77 percent ownership of Uljanik Brodogradnja 1856 which operates the bankrupt shipyard in Pula (Uljanik). A member of the supervisory board told state TV “We do not have a potential strategic partner now.” It is unclear what the next steps will be in the process which was launched last year seeking to bring in an international company to revitalize the operation.
The shipyard operation is also one of the oldest in the region dating to the 1850s and building ships for Austria-Hungary. It built more than 50 ships for the navy and after World War I was controlled by Italy mostly repairing ships. In the 1950s, it was relaunched as a state-owned commercial shipbuilder for cargo ships and tankers. The shipyard was sold to private interests in 2016 but was plagued by strikes, order cancelations, and mounting debt. In March 2019, a dozen former employees were arrested on accusations of fraud, and just two months later the company was forced into bankruptcy.
At the time of the bankruptcy filing, the shipyard was reported to be employing over 1,400 workers but had more than $25 million in debt. China Shipbuilding Industry Corporation visited the yard to explore a possible investment, but the government of Croatia supplied a nearly $100 million loan. By 2021, reports said the workforce had fallen to just 500 people and in the January 2023 tender they reported a total of 235 employees.
The creditors of Uljanik d.d. decided to sell the shares of the company in 2022 but the tender was delayed by legal challenges and reports of an offer from a Croatian holding company CE Industries. Media reports said the company offered €20 million and promised to provide an additional €10 million to cover debts and provide fresh working capital. The holding company reported that it has positions in 20 companies operating rail transport and recycling of raw materials and waste. In 2022, they also acquired a controlling interest in an engineering company.
The acquisition of the shares of the shipyard did not proceed and in January 2023 the creditors reported they were launching a tender with a minimum price of nearly €28 million. In March, they reported that they had not received bids and launched a second tender with a reduced minimum bid of €20.7 million. At the end of April, they reported that they again had failed to attract bidders.
The latest tender was launched in July with the new minimum bid set at €13.8 million. Reports said it represented 50 percent of the estimated value of the stake in the shipyard. Yet, they again failed to attract bidders. The government has said it would not provide additional support leaving it unclear what the next steps will be for the shipyard.