Govt Prepared To Issue Guarantees To Shipyards

Total Croatia News

ZAGREB, June 18, 2020 – The government on Thursday adopted a conclusion that expresses its readiness to join in the process of issuing state guarantees the Brodotrogir Cruise, Uljanik Brodogradnja 1856 and MKM Yachts shipyards.

“The signal we are sending today is our determination for Croatia’s shipbuilding to continue functioning (…) and that we wish to continue supporting shipbuilding on healthy foundations,” Prime Minister Andrej Plenkovic said.

Economy Minister Darko Horvat recalled that the ministry had received a request from Brodotrogir Cruise for a state guarantee to ensure advance payments for two passenger polar cruise ships for two American clients.

The total value of each ship is €39 million, and the clients will make an advance payment of 80% or €31.2 million for each ship, on the condition that the shipyard obtains a bank guarantee for the buyer.

“The shipyard has requested state guarantees in the amount of €24.96 million for each ship, which is 80% of the total advance payment and 64% of the sales price,” Horvat explained.

The ministry also received a request from the Uljanik dock for a loan in the amount of €4.33 million to launch production. The loan would be secured with a state guarantee earmarked exclusively to launch production at the newly-founded company at the dock.

The Rijeka-based MKM Yachts dock too submitted a request for a state guarantee for a loan of just over €100 million for the construction of a ship for a client from Malta. The guarantee would cover 80% of the loan or €80.13 million.

These guarantees will be activated in phases so that the amount the government will guarantee cannot exceed 64% of exposure by the end of 2021, after which the state’s exposure should decrease to a maximum of 48%, Horvat explained.

“With this conclusion, the government provides full support to the shipbuilding industry in Croatia with the aim of continuing production and retaining Croatia’s reputation on the shipbuilding market. This conclusion obliges the Ministry of Economy, Entrepreneurship and Craftsto launch proceedings, in cooperation with the Finance Ministry, to issue the requested state guarantees,” Horvat concluded.


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