Croatia government to extend guarantees of up to HRK150mn for 3. Maj shipyard

By bne IntelliNews August 22, 2019

The Croatian government will guarantee loans of up to HRK150mn (€20.3mn) to keep the 3. Maj shipyard in operation, the government announced on August 22.

The 3. Maj shipyard in Rijeka is part of the troubled Uljanik shipbuilding group. The other shipyard in the group, in nearby Pula, is currently subject to bankruptcy procedures. 

The guarantees are intended to make it possible for the shipyard to continue to work while it tries to find a long-term strategic partner.

"I consider this to be an extremely important and determined decision we are making today," Prime Minister Andrej Plenkovic said, according to a government statement.

The move will help reduce the government’s losses, Minister of Economy, Entrepreneurship and Crafts Darko Horvat pointed out. Despite an earlier restructuring of the Rijeka-based shipyard, it has continued to struggle with liquidity, and over the last two years the government has paid out HRK4.5bn to lenders after it guaranteed loans extended to the two Uljanik shipyards, which failed to deliver ships ordered. 

Under EU state aid rules, Zagreb is not allowed to provide financial support directly to the shipyard but it can guarantee loans provided by other parties, Reuters pointed out.

Looking ahead, Plenkovic said that it was most important to find the right strategic partner “that would make the restructuring and sustainability of this shipyard in the long run … that is what we also strive for and it is important for the workers at May 3 and Uljanik to understand as well.”

Related Articles

North Macedonia’s central bank cuts key rate by 0.25 pp

North Macedonia’s central bank decided on January 15 to cut the key rate to 2% from 2.25%, assessing that there is a space for further easing of monetary policy. The decision was based on ... more

Further Turkey rate cut on Jan 16 expected by 13 of 21 surveyed economists

Thirteen of 21 economists surveyed by Reuters said they expected that the Turkish central bank would bring in another rate cut at its monetary policy committee (MPC) meeting on January 16. The ... more

Turkey’s Oct industrial output data “ice in pants for those hoping for V-shape recovery” says economist

Turkish industrial production rose for the second-straight month in October—but the pace of the recorded growth was significantly less than anticipated, weighing on expectations for a fast ... more