Montenegro's govt urged to save Simo Milosevic spa centre

Earlier this month, the government decided to establish a special commission to address the persistent liquidity issues of Institut Simo Milosevic Igalo. The government, along with several state agencies, collectively holds nearly 60% ownership in the spa centre, with local hotel operator Vile Oliva owning 27%, while the remaining shares are held by smaller shareholders.

The commission, which held its first session earlier this week, warned that the company is "on the verge of bankruptcy, which is now only days or months away".

The commission will establish an operational team within the next seven days to develop the most effective solution for unblocking the Institute's account, enabling it to maintain services for current domestic clients and potentially attract new foreign clients, according to a statement released on Wednesday.

Once this goal is achieved, the commission will start evaluating a strategic model for the long-term sustainable and profitable operations of the spa centre, the statement read.

If the Institute resolves its financial challenges and avoids the worst-case scenario, there's a chance for the state and current management to develop a successful business plan for Montenegro's top medical tourism facility, the commission said.

The commission also noted that even though the state is the majority owner, it has neither the legal nor the financial capability to act as a creditor and take over the debts of Institut Simo Milosevic Igalo.

The company has reported a net loss of 157,328 euro ($167,967) in the first nine months of 2023, compared to a net profit of 2,995 euro in the prior-year period.

Its shares last traded on the Montenegro Stock Exchange on October 31, closing up 8.64% at 23 euro. The company is based in the Adriatic resort of Igalo, in the municipality of Herceg Novi.

($ = 0.933 euro)