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Bankruptcy Proceedings For Uljanik Shipyard Is Not The End; Chinese Interest

Bankruptcy proceedings for Uljanik shipyard is not the end; Chinese interest

Bankruptcy Proceedings For Uljanik Shipyard Is Not The End; Chinese InterestSource: Luka Rijeka d.d.

News Release – Government of Croatia – Opening of bankruptcy proceedings for Uljanik shipyard is not the end – May 13, 2019

Prime Minister Andrej Plenkovic said on Monday that the opening of bankruptcy proceedings for the Uljanik shipyard was not the end, but the beginning of a new phase, announcing that a Chinese delegation would again come to Croatia in about ten days to visit the shipyards and the Shipping Institute.

“The Commercial Court in Pazin on Monday opened bankruptcy proceedings for Uljanik after the shipyard’s account had been blocked for 231 days in a row.

Speaking to reporters during his visit to the coastal city of Sibenik, Plenkovic said that the decision was made by the court and that bankruptcy proceedings were initiated for the Uljanik shipyard and not for the Uljanik d.d. shareholding company, insisting on the distinction between the two.

He said that a delegation of the China Shipbuilding Industry Corporation (CSIC) were expected to make their second visit to Croatia in about ten days. “They will again visit Uljanik and the Shipping Institute, and will make a thorough and comprehensive analysis.”

A CSIC delegation visited the shipyards in Pula and Rijeka in late April and early May, but their intentions about the Uljanik and 3. Maj shipyards are still not clear.

Plenkovic dismissed statements by some political parties about who was to blame for Uljanik, putting them in the context of campaigning for the forthcoming European Parliament elections.

“This government didn’t give up on the shipyards and shipbuilding, or Uljanik. If anyone has done a lot for the shipyards, it’s this government, which had to pay HRK 3.2 billion (in state guarantees). There’s no other private company into which we paid so much budget money, while at the same time running a surplus,” the Prime Minister said.

He said that the Uljanik shipyard workers would now receive money that was owed to them, which was not possible before the bankruptcy process. “But the bankruptcy is not the end, it is different from liquidation. This is the beginning of a new phase,” Plenkovic said.

Earlier this month, Croatian Economy Minister Darko Horvat said that China Shipbuilding Industry Corporation (CSIC) sees Croatia’s Uljanik shipyard as a gateway to Europe,

Representatives of China Shipbuilding Industry Corporation (CSIC) visited troubled Croatian shipbuilders Uljanik and 3. Maj to analyse the financial situation at the companies.

The Chinese group is considering whether to invest in the yards or another type of partnership, and held meetings with Croatian government officials, as well as the management of Uljanik and 3. Maj.

“There was no conversation about any real estate business or the tourist aspects of any location. We talked only and exclusively in the segments of industrial production. Primarily, they have a very potent location, that is, the shipyard in Rijeka,” Horvat said after representatives of CSIC left the country.

The Chinese investment may represent the last hope for the restructuring of Croatian shipbuilders Uljanik and 3. Maj as a financial injection by the state seems unlikely. “We have said that such a philosophy of financing shipbuilding no longer makes sense,” Horvat said.

The shipyards are owned by the Uljanik shipbuilding group, which is facing financial problems and is seeking a strategic investor. The government has set a date of June 5, 2019, on decide on the opening of bankruptcy proceedings for the 3. Maj shipyard.

A Chinese investment would another step in Beijing’s strategy to acquire assets and rights linked to ports and shipping along the new Silk Road.

The new Silk Road (part of the Belt and Road initiative also known as One Belt, One Road, or OBOR) is a Chinese economic strategy to seek better access for Chinese-made products in European markets, which includes acquiring stakes in ports and other transport facilities, and cooperation agreements with countries along the Silk Road routes.

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