The future owner of the majority state-owned Uljanik Brodogradnja 1856, the surviving company left after the bankruptcy of the Pula-based Uljanik shipyard, will be sought via a public tender rather than through a direct sale to the Czech conglomerate CE Industries, Uljanik's shareholders agreed on Monday.
In November, local media reported that CE Industries had sent a bid to acquire a 54.8-percent stake in the state-owned Uljanik shipbuilding company for 155 million kuna (€20.6 million). The same holding company had previously bought the ailing Djuro Djakovic engineering company in eastern Croatia via their subsidiary DD Acquisition in September, in a €13.3 million deal.
CE Industries also offered to invest some 75 million kuna (€10 million) after acquisition, in order to cover Uljanik’s debts.
“This does not mean the rejection of the offer… but rather provides an opportunity to include other interested investors in the purchase process,” the state news platform Hina said on Monday.
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The government inherited a majority stake in Uljanik following the shipyard’s bankruptcy in early 2020. The company’s shareholders decided in the summer of 2022 that 54.77 percent of shares would be sold through a public bid, with the reserve price set at 208.3 million kuna (€27.6 million). In September, bankruptcy administrator Loris Rak said that there was interest from “potential domestic and foreign investors.” Everything was ready to issue a call for bids but “the process came to a halt due to the offer of the Czech group,” Hina explained.
Deputy County State Attorney, Nevenka Kovcalija, said that today’s decision provided “an opportunity for other interested investors” to take part in the sale, noting that “the bidders will be asked to sign a statement that shipbuilding will be retained at Uljanik.”
“We have decided to be transparent, to see if there are other offers,” said Kovcalija, adding that she hoped that the tender would be announced “as soon as possible.”
Boris Cerovac of the Independent Trade Union of Croatia stated after the meeting that legally large creditors are not allowed to make decisions about bankrupt companies to the detriment of small ones, “namely workers.” Hina did not specify the claims of former workers of the bankrupt company.
“Given that there are no other offers, I believe that this offer by CE Industries was a solution that should have been accepted, because it promised to fully cover all the workers’ claims. I think that the government, as the majority creditor, made a wrong decision, to the detriment of workers,” said Cerovac.
Uljanik was considered one of the most storied shipbuilding companies in the country, originally founded in December 1856 when the port city of Pula was a major naval base for the navy of Austria-Hungary, with Empress Elisabeth attending the laying of its foundation that year.
It went on to build more than 50 ships for the Austria-Hungarian navy before the dissolution of the monarchy at the end of World War I in 1918. As Pula was controlled by Italy for the next three decades, the shipyard survived as a dockyard primarily used to repair older ships. In the 1950s the state-owned company developed technology to build large cargo ships and oil tankers, and continued making specialized freighters well into the 2010s.
In 2016 the dock, which was by then privatized and reorganized as a holding firm with several daughter companies, crippled by chronic debt, asked for the government to step in and help save Uljanik with a €96 million loan. After workers’ strikes, order cancellations, arrests of managing board members on suspicion of fraud, and several attempts to find a new investor to save the business, bankruptcy proceedings were eventually launched in May 2019.
At the time if its collapse Uljanik had 1,400 employees. The surviving company, Uljanik Brodogradnja 1856, has 500 workers today, and posted a 13.4 million kuna (€1.8 million) loss in 2021.
In November, CE Industries reportedly promised that should the deal go through they would continue using the dock for building new ships, and also “supplement the production program with segments that it has specific know-how in,” as the Jutarnji List daily cited a letter signed by the CEO of CE Industries, Adam Sotek.
The Czech holding company includes some 20 companies which deal in rail transport, recycling of raw materials and waste, and engineering. The holding employs 2,400 workers and its annual turnover is around €350 million.
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