Montenegro to cover Crnogorska Plovidba's loan payment to Exim Bank

After Crnogorska Plovidba missed the January 21 payment deadline, Exim Bank reached out to the finance ministry, requesting fulfillment of its loan guarantor responsibilities and settlement of Crnogorska's outstanding debt, the government said on Thursday.

Even though Crnogorska was in the black in the first nine months of 2023, its revenue was down by an annual 24%, and is estimated to have contracted further for the full year. Therefore, the company was unable to pay the loan installment, according to the statement.

The installment is part of a $47.396 million loan agreement, which Crnogorska Plovidba signed with Exim Bank in 2010, to finance the purchase of two Chinese-made handymax bulk carriers. With a duration of 15 years, including a five-year grace period, and a fixed interest rate of 3.0%, payments occur biannually on January 21 and July 21.

The government said on Thursday that the last installment is due on January 21, 2025 and the outstanding amount of the loan at present is $7.1 million.

Due to financial troubles at Crnogorska Plovidba, the government had been assisting the company in repaying its Chinese debt until 2020. In 2021, the company again failed to meet its debt obligations, leading the finance ministry to intervene as the loan guarantor and pay $5.35 million to Exim Bank.

In 2023, Crnogorska Plovidba again couldn't fully repay its loan. Despite a ruling from the anti-trust agency declaring state guarantees illegal, the government had to provide $3.6 million to meet its obligations as the loan guarantor with Exim Bank.

As of end-January 2024, Crnogorska Plovdba owes the Montenegrin government $8.97 million due to the activated loan guarantees.

The government owns 100% of Crnogorska Plovidba.

($ = 0.930 euro)