The Commercial Court in the Istrian town of Pazin on Monday opened bankruptcy proceedings in the Pula-based Uljanik shipyard.
The bankruptcy hearing for the dock had already been postponed twice, the last time in late April because representatives of the China Shipbuilding Industry Corporation visited Uljanik and the Rijeka-based 3. Maj in late April. The intentions of the Chinese regarding the two docks remain unknown.
3. May and Uljanik have been suffering for months after being hit by massive losses, had their bank accounts frozen due to unpaid debts to suppliers, as well as dealing with order cancellations and strikes.
In April, judge Ivan Dujic postponed the decision on launching bankruptcy proceedings for the May 3 dock saying they would be launched on that date if Uljanik’s bank account was not unblocked by that time.
Uljanik’s account has been frozen for 231 days now, according to chairman of the shipyard’s board, Sandi Bozac.
Motions for launching bankruptcy proceedings in the group’s companies, including the 3. Maj dock in Rijeka, have been filed by the Financial Agency (Fina) because their bank accounts have been frozen over 120 days. Fina filed the motion for the Uljanik shipyard at the end of January because its account was frozen over a debt of 75.9 million kuna (€10.2 million). The latest figures released by Fina show the dock debt totals 164.8 million kuna (€22.2 million), including 76.5 million kuna (€10.3 million) in workers’ receivables.
Some 1,110 people who are employed in the Uljanik-owned docks, of which some 1,050 in Pula and 60 in Rijeka, will be laid off.
While several drafts of restructuring plans, intended to be jointly funded by the government and a private company selected as the group’s partner, have been submitted over the past year or so by the privatised Uljanik Group’s management board, the government in late March did not sign off on a plan for the docks. The rejected plan would have cost the government a minimum of 7.5 billion kuna (€1 billion), which, according to Prime Minister Andrej Plenkovic, did not look sustainable.
The shipbuilding industry has traditionally always been heavily subsidised. In the period from 1992 to 2017, a total of 31.7 billion kuna (€4.3 billion) had been spent on various restructuring plans and subsidies, including 4.3 billion (€580 million) for the Uljanik shipyard, and another 9 billion (€1.2 billion) for the 3. Maj dock, Plenkovic had said in March.
On top of that, the government may also be required to spend another 15.3 billion kuna (€2 billion) for bank guarantees for cancelled orders. Around 3.1 billion kuna (€420 million) has already been paid for that purpose until March 2019.
Over the past month, bankruptcy proceedings have already been opened in four other companies within the Uljanik shipbuilding group. A decision on whether to launch bankruptcy proceedings in the Uljanik Group as a whole will be made at another hearing, scheduled for May 17.
(€1 = 7.4 kuna)
Follow N1 via mobile apps for Android | iPhone/iPad | Windows| and social media on Twitter | Facebook.