Croatian gov't rejects restructuring plan for biggest shipyard

ZAGREB, March 28 (Xinhua) -- The Croatian government rejected on Thursday a proposed restructuring plan for the country's biggest shipbuilding group Uljanik, which pushed the company on the brink of bankruptcy.

Prime Minister Andrej Plenkovic explained at the government session that the cost of restructuring would be too big for the country and its taxpayers.

In the worst-case scenario, he said, it would be up to 10.8 billion kuna (1.63 billion U.S. dollars) and in the best-case 7.5 billion kuna.

"We remain open to additional solutions for the shipyards in Pula and Rijeka," the prime minister said.

Plenkovic explained that in the period from 1992 to 2017 the state had spent a total of 31.7 billion kuna for various restructuring plans and subsidies, including 4.4 billion for the Uljanik shipyard in Pula and another 9 billion kuna for the "3. Maj" shipyard in Rijeka. These two shipyards are now part of the crisis-hit Uljanik Group.

In February, the company selected another Croatian shipyard, Brodosplit, as a new strategic partner.

Details of the restructuring plan were never released to the public, but the owner of Brodosplit, Tomislav Debeljak, told local media on Thursday that they have offered a positive future while the expenses from the past should be solved by the one who created them.

Economy Minister Darko Horvat told reporters on Thursday that this government has finally said "enough" to the unconditional financing of that economic branch.

"That doesn't mean that this government has turned its back to the shipyards in Pula and Rijeka. There is still a prospect for Rijeka and Pula through the bankruptcy proceeding," the minister said.

A court in Rijeka was supposed to decide on Thursday whether to formally launch bankruptcy of the shipyard "3. Maj", but it postponed the decision for April 17. A court in Pazin should decide on Friday whether the Uljanik shipyard would be sent to bankruptcy.

The Croatian government's decision to reject a restructuring plan came only two days after the police arrested 12 executives of the shipbuilding group, under suspicion of committing fraud worth around 1.2 billion kuna.

At the same time workers in the shipyard are still striking. Union leader Boris Cerovac hopes that the court in Pazin will postpone on Friday its decision on the bankruptcy of Uljanik.

"After tomorrow's decision we will know what to do. Either we are going to call people to leave Croatia or we will continue to fight for our shipyard," Cerovac said.

When it comes to shipbuilding, Croatia was once among global leaders. In the last ten years, this prosperous industry has been slowing down, although it still shares up to ten percent of Croatian employment and two percent of the country's GDP. Enditem