January 23 (SeeNews) - The creditors of financially troubled shipbuilding group Uljanik have decided to send it into the process of liquidation due to a lack of conditions for restarting its production, the government said.
The decision was taken by the group's creditors at a hearing in the commercial court in Pazin on January 22, the government said in a statement on Wednesday.
The bankruptcy trustee, Marija Ruzic, has established that there is no basis for drafting a bankruptcy plan for the company that could lead it out of the crisis and its liquidation is imminent, because the value of its assets is 1.75 billion kuna ($261 million/235 million euro) while liabilities total 5.0 billion kuna and the group is generating no business revenue, the statement reads.
At the same time, Ruzic has proposed to delay the sale of part of Uljanik Group's assets, which could be transferred to a newly registered company, Uljanik Brodogradnja 1856. The latter could also obtain Uljanik's concession rights on 666,000 sq m of maritime area and try to renew the shipbuilding activities. For the purpose, the new company will also need a financial support by the government, Ruzic was quoted as saying.
This plan has been supported by the creditors and now needs the approval of the government, Uljanik's largest creditor. The government noted that it needs to take a final decision on any such move after considering the risks to the state budget, as well as its compliance with EU state aid rules.
In May 2019, the Pazin court launched bankruptcy proceedings against Uljanik Group and its key member 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.
Uljanik Group has been in financial trouble in the past years due to the adverse effects of the global financial crisis on the shipbuilding sector. The government has declined to endorse a plan for the restructuring of the two shipyards, considering the risk for the country's economy to be too big.
In late 2018, the government had to pay state guarantees worth 2.54 billion kuna on behalf of Uljanik, after the group failed to meet contractual obligations.
(1 euro = 7.44387 kuna)