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Croatia's govt pledges support to struggling 3 Maj shipyard

Author Iskra Pavlova
Croatia's govt pledges support to struggling 3 Maj shipyard Photo: Goran Kovacic/PIXSELL

ZAGREB (Croatia), August 1 (SeeNews) - The Croatian government stated on Thursday its readiness to provide support to troubled 3 Maj shipyard in order to help it avoid bankruptcy and restart production.

The government said in a statement filed with the Zagreb Stock Exchange (ZSE) that it is ready to get involved in the process of unblocking 3 Maj's accounts via issuing state guarantees, and thus help the struggling shipyard restart production and complete vessels already under construction.

The government also said it decided to put the economy ministry together with Croatian Shipbuilding Corporation – Jadranbrod (CSC) in charge of making a detailed analysis of the plan. 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.

Once the analysis is made, the economy ministry should prepare a list of concrete measures and decisions that need to be taken in order to help 3 Maj avoid bankruptcy and restart production, and submit it to the ministries of finance and justice. The two ministries should then propose to the government by August 29 the legislative steps it needs to take in order to implement the plan.

The government also said it has adopted the plan in response to a request for the issuance of state guarantees submitted by the 3 Maj's management on July 30.

Following the government's announcement, the commercial court in Rijeka postponed the hearing on the launch of bankruptcy proceedings against 3 Maj which was scheduled for Thursday.

The Rijeka court said in a filing to the that the bankruptcy hearing against 3 Maj was rescheduled for September 26, since the government pledge to intervene should result in unblocking the company's account, thus removing the main reason for the launch of bankruptcy proceedings.

The court also said that Croatia's financial agency, FINA, which had requested the launch of bankruptcy, has informed the court that 3 Maj's overdue debt including interest totalled 81.48 million kuna ($12 million/11 million euro) as of August 1, including 34.19 million kuna of unpaid wages, 19.33 million kuna owed to the government, 10.32 million kuna owed to state power utility firm HEP, and 17.63 million kuna of unpaid debt to suppliers.

3 Maj is part of troubled shipbuilding group Uljanik. The group includes another major shipyard in Croatia, Uljanik Shipyard, along with smaller subsidiaries.

In May, a Croatian court launched bankruptcy proceedings against Uljanik Shipyard on FINA's request citing the shipyard's overdue debt. Subsequently, the court also launched bankruptcy proceedings against the Uljanik Group.

(1 euro = 7.38600 kuna)