State Almost Certainly to Pay 70 Million Euro of Shipyard Loan Guarantees

Total Croatia News

ZAGREB, September 5, 2018 – Finance Minister Zdravko Marić said on Wednesday that it was most likely that guarantees issued to the Uljanik and 3. Maj shipyards, which are part of the Uljanik Group, would be activated and that they amounted to almost 70 million euro.

Responding to reporters’ questions ahead of a meeting of the inner cabinet, Marić said that, from the ministry’s point of view, the guarantees that were issued covered certain obligations and would most likely be activated.

“Considering that contracts for the construction of four ships have been cancelled, in addition to advance guarantees of 30 million euro, we need to take into account that loans were also taken out for the construction of those ships and they too are also partially backed by guarantees. As such, we are talking about an amount of almost 70 million euro,” Marić said.

Asked whether the guarantees would be activated and whether they would immediately burden the state budget, Marić said that the guarantees were of such a nature that legally required “unconditional payment at first request.” He said that a solution would have to be found through talks with the clients who commissioned the ships and the financial industry, and that it was realistic to expect that the clients would activate those guarantees.

“As far as responsible management of public finances and budget policy is concerned, as the finance minister, I am also prepared for the worst possible case scenario, with all guarantees being activated and withdrawn,” Marić said.

In light of a working visit to Croatia on Friday by EU Commissioner for Competition Margrethe Vestager, reporters asked the minister if the solution was heading toward bankruptcy or pre-bankruptcy, and Marić said that the governments had for years not dealt with many problems, including those at Uljanik, leaving its management to management boards, supervisory committees and owners.

“Now we are faced with an already familiar situation and we cannot expect some instant solution. We are taking numerous aspects into consideration, and, as I have said on many occasions, the situation isn’t that simple,” Marić said.


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