Financial Agency Proposes Brodotrogir Shipyard Bankruptcy

Lauren Simmonds

Updated on:

As Suzana Varosanec/Poslovni Dnevnik writes, just one month after the recent promising messages related to the Brodotrogir shipyard, which were important to the whole group due to the announcement of negotiations with bankers and the sale of the marina there to save business operations, as well as the survival of the parent company, there has unfortunately been a reversal.

To be more precise, the Financial Agency (Fina) filed a motion with the competent commercial court to open bankruptcy proceedings for the debtor of the Brodotrogir shipyard.

As stated in the proposal, back on April the 16th, this debtor in the register has recorded unexecuted bases for payment in an uninterrupted period of 137 days, in the total amount of 3.895 million kuna, which includes interest and fees due to Fina for the implementation of foreclosures on cash. According to the data held on the number of employees submitted to the Financial Agency by the Croatian Pension Insurance Institute, the Brodotrogir shipyard has 51 employees. It remains to be seen what developments will follow in this somewhat complicated case, given the previous and current announcements as well as the not-so-rare practice of settling debts that are the reason for the account blockade in the first place.

The Brodotrogir shipyard published losses of 305 million kuna back in pre-pandemic 2019, of which about 72 million kuna was covered from retained earnings, but the rest of the approximately 233 million kuna was transferred to the position of carried forward loss. These losses were mostly, at least according to official business documentation, due to reduced business activities when compared to previous years and also due to increased expenses, among other things, owing to the impairment of fixed assets and investments in subsidiaries, as well as value adjustments of unsecured receivables of the debtors who have faced financial problems, bankruptcy or late payments for more than one year.

In the pre-bankruptcy proceedings of this debtor which were opened approximately two years ago at the Commercial Court in Split, the Brodotrogir shipyard was released from its then cumbersome financial blockade and continued its regular business operations, with the established liabilities at the beginning of July 2019 amounting to around 319 million kuna in total, of which the largest amount – 214 million kuna, was determined according to unsecured creditors.

In addition to the above, according to the auditor’s report, there are also debt obligations on loans from SCT, Kairos Shipping LLC I and Kairos Shipping LLC II. According to the notes, by the end of that year, the company had issued a large number of promissory notes in favour of the banks and the Ministry of Finance in the amount of approximately 1.6 billion kuna, guaranteeing the debts of the companies within the Brodotrogir Group and other affiliated companies amounting to about 423 million kuna back on the 31st of December, 2019. In addition, the settlement reached was overturned on the basis of a lodged appeal.

The Brodotrogir shipyard, an umbrella company 95 percent owned by Kermas Energija, manages the shipbuilding company Hrvatska brodogradnja Trogir, the company Brodotrogir Cruise, which builds cruisers, and BT Hull, which equips ships. Brodotrogir Cruise, according to sources from the group itself, took over some of the workers of HBT and BT Hull.

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