February 5 (SeeNews) - Croatia's troubled shipyard 3 Maj is neither insolvent, nor over-indebted, but has been unable to service its debt due to the blocking of its bank account, the company's bankruptcy manager Zdravko Cupkovic has said.
The balance of 3 Maj shows that the company's assets significantly exceed its liabilities which means that it is not insolvent, according to a report sent to the Rijeka Commercial Court on January 31 by the bankruptcy manager, the shipyard said in a filing with the Zagreb Stock Exchange on Monday.
However, the company has been unable to service its debt, as its bank account has been blocked for a period of 160 days, which is the single condition for the launch of bankruptcy proceedings that has been met, Cupkovic said.
"Therefore, the company is not insolvent, nor over-indebted, but unable to pay its liabilities at the moment," Cupkovic said in the conclusion of the report.
In a separate report sent to the Rijeka Commercial Court, the director of 3 Maj, Maksimilijan Percan, said the company can easily cope with its financial troubles in the short term, as it has signed a contract for the supply of a car and truck carrier and received a letter of interest from Canadian shipping company Algoma Central Corporation for resuming the construction of two vessels in December.
Moreover, steps have been taken for the repayment of debt owed by shipping company Uljanik Plovidba [ZSE:ULPL], Percan noted.
The Rijeka Commercial Court launched a procedure for establishing the prerequisites for opening bankruptcy proceedings against 3 Maj and appointed Cupkovic as temporary bankruptcy manager last month.
The 3 Maj shipyard is part of Croatia's indebted Uljanik shipbuilding group, which has been in financial trouble for some time due to the adverse effects of the global financial crisis on the shipbuilding sector in general which has led to a drop in orders for new vessels.