March 27 (SeeNews) - Croatia's government said it has endorsed the transfer of a 30-year concession awarded in the past to local shipbuilding group Uljanik, which is a subject of bankruptcy proceedings, to newly-registered Uljanik Brodogradnja 1856, since the former company is unable to meet its contractual obligations.
The transfer of the concession will help revitalise shipbuilding activities in the Adriatic city of Pula, where Uljanik is based, the government said in a statement on Thursday.
The new concession holder is taking over all rights and obligations of the former owner, as described in the original concession contract. At the same time, in the next 90 days the new concession holder is obliged to submit with the transport ministry a certified debenture for the amount of 4.0 million kuna ($579,000/526,000 euro), which is equivalent to the payment of two annual installments of the fixed part of the concession fee. If Uljanik Brodogradnja 1856 fails to do so, it will lose the concession rights.
In January 2011, Uljanik signed a 30-year concession deal with the Croatian government for the use of 326,471 sq m of land and 340,400 sq m of sea area for the purpose of its shipbuilding operations. The annual concession fee consists of two elements - a fixed payment of 3.00 kuna ($0.44/0.39 euro) per square metre, and a variable payment set at 1% of the company's total annual revenue.
In January 2020, Uljanik's bankruptcy trustee, Marija Ruzic, established that the company's liquidation is imminent because the value of its assets is several times below the size of its liabilities.
Back then, Ruzic has also proposed to delay the sale of part of Uljanik Group's assets, which could be transferred instead to a newly registered company, Uljanik Brodogradnja 1856, which will obtain Uljanik's concession rights in order to resume shipbuilding activities. She also noted that for the purpose, the new company will need financial support by the government.
In May 2019, the Pazin court launched bankruptcy proceedings against Uljanik Group and its key member, Pula-based Uljanik Shipyard.
The group operates another one of Croatia's largest shipyards - 3 Maj, which avoided the launch of bankruptcy proceedings in September 2019 after the government decided to issue guarantees for a 150 million kuna loan from state-owned development bank HBOR to 3. Maj.
(1 euro = 7.61058 kuna)