Economy Minister Martina Dalic said on Tuesday her ministry was working on a guarantee fund to ensure stable support for financing Croatian shipyards.

Speaking at a conference on Croatian shipbuilding in Zagreb, Dalic said the government would support the sector, although not in the form of direct state aid, but through sound market-based support.

Three major domestic shipyards – 3. Maj, Brodsplit and Brodotrogir – have been restructured, and the global shipbuilding market is at a good stage, which means there are opportunities for developing Croatia’s shipbuilding sector, Dalic said.

Over the next ten years, under rules of state aid, those three must function independently on the market, without any form of state aid, Dalic said, but added that shipyards could still utilise other forms of government support.

Speaking to reporters on the sidelines of the conference, Dalić said the economy ministry, in cooperation with the Croatian Bank for Reconstruction and Development (HBOR), is looking for a way to ensure stable support for financing shipbuilding for shipyards that were not in financial trouble.

This would take the form of a guarantee fund for all shipyards, provided they are financially stable, have good business results, Dalic said, adding that it was too early to estimate the guarantee fund sums that the shipyards could count on.

Commenting on the Pula-based Uljanik shipyard, she said the government had supported its restructuring in January, and now expects company’s management to find a strategic partner, which would then allow the second stage of company’s restructuring. This would include fresh capital from the strategic partner, as well as talks with the European Commission on whether any government help would still be necessary.

Uljanik was given a €96 million state guarantee in January te help its restructuring, and a six-month deadline to find a strategic partner in order to ensure its survival. In February shareholders decided to increase company’s equity, saying a potential partner would need to invest some €100 million in the business. Letters of intent were then received by the Croatia’s Kermas Energija and Italy’s Palumbo Group.

Dalic said the government had decided to give Uljanik a state guarantee because its order book was “relatively full, meaning that, in the restructuring process, Uljanik has its place on the market.”