As Poslovni Dnevnik/Marija Brnic writes, yet another vessel for the transport of liquefied petroleum gas (LPG) will soon sail under the Croatian flag – a part of some new reinforcement of the Croatian Jadroplov’s fleet. The Croatian Government recently approved the purchase of another vessel with HBOR, making it the second in less than one year.
It’s important to emphasise that this doesn’t act as an actual guarantee for the loan, and it is merely an approval, which is necessary since it is a company majority-owned by the state and with a debt of more than one million euros. More specifically, we’re talking about loans in the amount of 15.2 million US dollars, with a repayment period of 10.5 years and a grace period of six months, and with an interest rate of 6.48%.
Cooperation with the Japanese
For this Split-based shipping company, this is an additional spring in its step pushing it back up from the bottom it has unfortunately been stuck in in for years now, and the government will still continue to provide it with insurance and credit for the implementation of its entire financial rehabilitation.
All of this is a prelude to the announced recapitalisation, which should strengthen Jadroplov and see it go from 150 million kuna to 350 million kuna. According to the announcement of the President of the Management Board of Jadroplov, Ivan Pavlovic, the recapitalisation would also provide a basis for continued cooperation with the Japanese shipyard where the two LPG ships, named Marko Marulic and Vis, have been constructed so far, with the plan being that future ships will be able to transport other types of cargo that require cooling.
Although doubts have already begun to appear about the realisation of the recapitalisation, Pavlovic has confirmed that it is being worked on, InterCapital has been engaged, and it will be realised in the typical way, with the issuance of a prospectus and with the approval of Hanfa, the announcement of a public offer and the listing of new shares on the stock exchange.
“We’re going forward with the recapitalisation this year”, Pavlovic explained, who has been visiting investors for a long time and talking about their involvement in this big undertaking for Jadroplo. Most of all, he says, he wanted pension funds to be involved, but they made it clear to him that they weren’t interested in investing in such a volatile activity.
The ideal investors for Pavlovic would be, for example, INA, and he’s prefer Croatian shippers, but due to the weak interest in the domestic market, Pavlovic is also talking to people abroad, including shippers in Greece and Turkey, and he is currently going as far as to Japan for talks.
“This is a good model for Jadroplov, because shipping has almost disappeared in Croatia and Split, and with the ongoing modernisation of the Croatian Jadroplov fleet and turning to other niches, trust is gradually returning,” said Pavlovic, who hopes that others will recognise this and participate in the recapitalisation process. In addition to entering a new business with LPG, Jadroplov intends to further disperse its business, and their ambitions are turned towards ferry transport.
The already prepared project, for which the ship’s builder, the 3 Maj shipyard from Rijeka, has been selected, will apply to the tender for non-reimbursable EU funds intended for the development of green technology, and it regards an electric ferry worth 50 million euros. The ship would carry one thousand passengers and 150 cars and would be the first electrically powered ferry of its size in all of Europe. This project is also a way to send out the message to investors that the new Jadroplov has transformed for the better.
A good couple of years
Over the past two years, Jadroplov operated with a profit, in 2021 more than 100 million kuna was realised, which covered losses from earlier years, and according to the first unaudited data for 2022, 87.4 million kuna was realised. However, the company is troubled by its old obligations, and because of that, it requested and received approval from the government to extend the repayment of the remaining obligations for the loan taken back in 2016 for the sake of financial stability.
Due to the moratorium that was made possible during the coronavirus pandemic, at the end of March, a total of 3.95 million US dollars of principal has to be paid, which Jadroplov will pay out over the next three years. In the meantime, the recapitalisation should ensure further safe navigation for this Split-based company and the new vessel joining the Croatian Jadroplov fleet.
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