Uljanik Needs Hundreds of Millions to Survive

Total Croatia News

ZAGREB, February 16, 2018 – The Uljanik Group must be restructured and additional capital must be ensured for it by, among other things, choosing a new strategic partner to enter the group’s ownership structure because without its restructuring, 569 million euro worth of government guarantees will have to be activated, 4,500 jobs could be lost and the shipbuilding industry in Pula and Rijeka might be lost for good, CEO Gianni Rossanda said at an extraordinary assembly of the group’s shareholders on Friday.

The assembly was also expected to make a decision on the recapitalisation of the Pula-based Uljanik shipyard, and before it, Rossanda informed the group’s shareholders in detail about the group’s financial situation, financial rehabilitation and the selection of a strategic partner.

Rossanda said that the group expected the future potential strategic partner to contribute close to 100 million euro to the group’s restructuring. He noted that, given the amount of the government’s guarantees, which amount to more than 300 million euro, investors who would possibly want to dismantle the local shipbuilding industry would be ruled out as strategic partners.

So far, letters of intent regarding participation in the restructuring and diversification of the Uljanik shipyard have been submitted by Kermas Ulaganja and the Naples-based Palumbo Group, according to Rossanda.

He said that today’s assembly would launch the first cycle of increasing the group’s equity in the amount of 180-320 million kuna of its own required contribution to the restructuring costs. “Basically, as shareholders, we are now creating a basis to avoid liquidation – no one who wants to keep the shipbuilding industry running must even think of that – as well as creating a basis for a new, stronger Uljanik,” said Rossanda.

He said that, along with highly sophisticated vessels and special floating objects – which would constitute the shipyard’s main line of products, the shipyard would undergo diversification to build a winter overhaul centre for mega-yachts.

Rossanda added that a permanently sustainable shipbuilding process at both of Uljanik’s locations (Pula and Rijeka) required cutting the number of workers from the current 4,000 to 2,900, with 1,100 workers becoming redundant – 750 in Pula and 350 in Rijeka. He promised that, once the restructuring process started by the end of the year, Uljanik would find a way to provide for its redundant workers in the best possible way.

In 2017, the Uljanik shipyard recorded a loss of 245 million kuna even though sales were 512 million kuna higher than in 2016. The main reason for this was the shipyard’s financial contribution to the restructuring of the “3. Maj” shipyard in Rijeka, a member of the Uljanik Group, said Rossanda.

According to preliminary figures, the Uljanik Group’s loss in 2017 totalled 680 million kuna even though its sales were 112 million kuna higher than in 2016, totalling around two billion kuna.

Later in the afternoon, the shareholders in Pula’s Uljanik shipyard decided to increase equity by between 180 and 302.22 million kuna, and the shipyard is looking for a strategic partner that will invest about 100 million euro.

Under today’s shareholders’ decision, equity could go up from 100.69 million kuna to a maximum of 402.91 million kuna.

CEO Gianni Rossanda said the government “has extended full support to the Uljanik Group and approved a state guarantee to borrow 96 million euro, as requested, because restructuring is the only long term solution for the survival of the Uljanik shipyards.”

He said the government had made the state guarantee conditional on increasing equity, finding a strategic partner, and restructuring the company in cooperation with the strategic partner.

Istria County Prefect Valter Flego said Uljanik was a symbol of Istria and the town of Pula and that preserving the shipbuilding industry and jobs was of the utmost importance. “Only by pulling together can the shareholders, the unions, the management board, the town, the county and the state see this process through,” said Pula Mayor Boris Miletić.


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