Could “New Build 526” Represent New Start for Enfeebled Pula Shipbuilding?

Lauren Simmonds

Copyright Romulic and Stojcic
Copyright Romulic and Stojcic

Copyright Romulic and Stojcic

As Novac/Vedran Marjanovic writes on the 10th of November, 2020, for several weeks now, the Kuwaiti shipowner Livestock Transport and Trading Company has been unsuccessfully trying to agree with the Croatian state administration on the completion of the construction of the largest ship in the world for the transport of live cattle in Pula’s Uljanik – New build 526/Novogradnja 526.

As confirmed to Jutarnji list from several sources, the aforementioned Kuwaiti company which operates within the Al Mawashi group, and whose business is the transport of live cattle, came across the walls put up by Croatia’s state institutions after they expressed interest in Uljanik’s construction of New build 526, a livestock carrier, which is now sitting in an unfinished state at the Pula shipyard.

”There’s a buyer for the vessel, the vessel is there at a certain degree of completion, there is equipment for the ship that is in the warehouses of Uljanik, and there is the company Uljanik shipbuilding 1856 which the state founded to continue shipbuilding in Pula with workers and capital. Everything is there, but the state has no will, doesn’t want to do it, or something else is in question. It doesn’t want to sit down with the Kuwaitis and finish the job,” explained the interlocutor, who is well acquainted with Al Mawashi’s contacts with Uljanik.

He doesn’t want his name or surname to be revealed, but he claims that a representative of Al Mawashi was at both the Ministry of Economy and Sustainable Development and at the Ministry of Finance, which represent the state’s interest in the bankruptcy of Uljanik, and put forward an offer from the Kuwaitis to buy Uljanik’s New build 526.

”The Kuwaitis are well known to both Uljanik and Croatia’s state institutions because they ordered the construction of New build 526 back in 2015, but in April 2019, like most of Uljanik’s clients, they terminated that contract due to the opening of bankruptcy proceedings in the Pula shipyard. Now they’re ready to get back into business, they want to buy the vessel and that’s the only commitment any serious investor can take on at this stage of construction. Everything else about the completion of the vessel is up to the state, which constantly repeats this mantra that shipbuilding in Uljanik hasn’t been shut down,” the interlocutor explained.

New build 526, or what has been done so far in terms of its construction, isn’t formally owned by the state at this time, but is part of the bankruptcy estate of Uljanik d.d., whose main creditor is the state. Hence, the representative of Al Mawashi “knocked” on the door of the two ministries that represent the interests of the state in the bankruptcy drama surrounding Uljanik.

The Ministry of Economy and Sustainable Development didn’t confirm or deny the information that a representative had made an offer to purchase New build 526.

”New build 526 is part of the bankruptcy estate of the company Uljanik d.d. Bankruptcy proceedings against Uljanik d.d. were opened on May the 20th, 2019. The Bankruptcy Trustee is taking care of the protection and liquidation of the bankruptcy estate,” the Ministry of Economy and Sustainable Development briefly stated. It’s quite clear from this answer that they don’t intend to get involved in saving New build 526.

In other words, the state doesn’t want to separate New build 526 from the bankruptcy estate of Uljanik d.d. as it has done in some other cases. Nor does it want to invest in the completion of the vessel and sell it to the Kuwaitis and thus charge for the investment. There has, as yet, been no answer from the Ministry of Finance to questions about negotiations with the Kuwaitis and the state’s plans as the main creditor in the bankruptcy of Uljanik with the construction of this vessel.

Shifting the blame

”According to the information I have, the Kuwaitis are losing patience and will definitely give up buying by the end of the year at the latest. If this happens and the ship doesn’t find another buyer, it’s clear that it is very likely a huge damage, for which, according to the old custom in our country, no one will be responsible,” noted the source.

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