August 22 (SeeNews) - The Croatian government said on Thursday it adopted a decision to issue state guarantees on loans of up to 150 million kuna ($22.5 million/20.3 million euro) to troubled 3. Maj shipyard to help the company restart production and complete vessels already under construction.
The state guarantees will serve for taking loans from the Croatian Bank for Reconstruction and Development (HBOR), or any commercial bank, the government said in a statement.
However, Croatia's finance ministry will issue the pledged state guarantees only if 3. Maj meets several conditions by September 5, the statement added.
The first condition is to agree with all creditors a postponement of their claims on unpaid debt until September 1, 2021.
The second condition is to negotiate with HBOR, or any other bank, a credit agreement at market terms, whose validation will depend on the issuance of the state guarantees.
3. Maj should also hire Croatian Shipbuilding Corporation – Jadranbrod (CSC) as a supervisor on the works for completion of vessels already under construction. Zagreb-based CSC was established by the government with the main task of providing expert monitoring of the restructuring process and modernisation programmes of Croatian shipyards.
The fourth and final condition is that 3. Maj present to the finance and economy ministries a detailed analysis on how it will spend the funds that will be provided thanks to the pledged state guarantees, and to elaborate on the effect this will have on the company's operations and on the resulting decrease of the government's guarantee exposure at 3. Maj.
Earlier in August, the government announced plans to support 3. Maj, following which the commercial court in Rijeka postponed for September 26 a hearing on the launch of bankruptcy proceedings against the shipyard. The court has said that the government's intervention should result in unblocking the company's account, thus removing the main reason for the launch of bankruptcy proceedings.
3. Maj is part of troubled shipbuilding group Uljanik, which includes another major shipyard in Croatia, Uljanik Shipyard, along with smaller subsidiaries.
In May, a Croatian court launched bankruptcy proceedings against Uljanik Shipyard on a request of the country's financial agency citing the shipyard's overdue debt. Subsequently, the court also launched bankruptcy proceedings against the Uljanik Group.
(1 euro = 7.3942 kuna)