Economy Minister Says Brodosplit Shipyard in Somewhat More Complex Situation

Total Croatia News

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Image: Pixabay
Image: Pixabay

Addressing the press after a conference on the National Recovery and Resilience Plan (NPOO), Ćorić said that Brodosplit had undergone successful restructuring, which had cost the state budget HRK 1.5 billion.

The minister also explained that the DIV Group, of which Brodosplit is a member, had taken the positive course, however, the progress was overshadowed by the corona crisis and the repercussions of Russia’s military aggression against Ukraine.

“The issue of shipbuilding in Split is not simple and should considered from several points of view,” says Ćorić, adding that he is nevertheless optimistic that Croatia’s shipbuilding industry stands good chances.

The president of the management board of the DIV Group and the Brodosplit shipyard said on Thursday the company was suspending production because €60 million of its funds were currently blocked. Speaking to Hina, Tomislav Debeljak said Brodosplit was financing the building of two ships with funds from VTB Europe, a Russian-owned bank subject to considerable restrictions due to the war in Ukraine.

“The situation we are in is extremely dramatic because VTB has stopped further loan payments because of the war in Ukraine, which has blocked us,” Debeljak said, noting that €60 million of the company’s funds were “trapped” in those projects.

A member of the DIV Group Management Board, Darko Pappo, said today at the conference which was attended by Ćorić that that DIV was very much affected by the current situation because two major projects were financed by the Russian-owned bank, with EU sanctions against Russia having prevented the completion of the projects and their refinancing.

“We are talking about two loans amounting to €90 million, with our share totalling around €60 million. That is a huge amount of money and this has made us suspend production,” Pappo said.

He added that he expected the government to make decisions fast to help the shipbuilding group overcome the situation. The executive also said that there were end-buyers for both projects, contracts on long-term lease and a repayment schedule, and that, even though state aid is not necessary, the situation requires a prompt government reaction.

The government should support DIV’s proposal for the loans to be refinanced with HBOR (Croatian Bank for Reconstruction and Development) funding under commercial terms, and one of the loans should be fully repaid by the end of the year while the other would be repaid over a longer period of time, said Pappo.

“That would ensure the continuation of production and normal functioning,” he said, adding that both the Brodosplit shipyard and DIV Group operate in the black and employ a large number of workers, which is why they believe the government and HBOR should step in.

Pappo recalled that the recent case of Sberbank showed that a prompt reaction by the government was possible.

For more, check out our politics section.


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