The government on Thursday gave the go ahead for a sales contract and transfer of stock of the Brodotrogir shipyard to the Kermas energija company owned by businessman Danko Koncar which is expected to be signed on Saturday, 6 April in the central Adriatic town of Trogir.
Economy Minister Ivan Vrdoljak at the cabinet session underscored that the privatisation process of this shipyard had gone on for quite some time during a period of global recession, however in the end a realistic restructuring plan has been presented and accepted, he said.
The contract defines that the government would write-off receivables incurred in taking over loans for which government guarantees were issued and to additionally take over the cost of overhauling the dock worth HRK 380 million.
This refers to HRK 151.6 million due to delays in production processes and lack of new contracts, HRK 14.4 million due to expected losses in constructing previously contracted ships, HRK 164 million due to expected losses in constructing new ships and HRK 50 million to cover severance pays for surplus employees.
This year HRK 130 million will be paid out and next year a further HRK 150 million and the remaining HRK 50 million in 2015 while funds to cover severance pays will be deposited upon receipt of an approved plan submitted by the Croatian Employment Institute.
Apart from that a further HRK 20 million is foreseen to offset state support for advances in guarantees for new ships.
Koncar on the other hand is obliged to pay HRK 2.04 billion for the overhaul in installments until the docks restructuring is completed which is scheduled for 1 July 2018.
Koncar has also conceded not to sell shares before 1 July 2018 without prior government approval.
It was also agreed that if Koncar was to unveil any hidden costs incurred by the docks within 12 months he was obliged to immediately inform the Government Asset Management Agency (AUDIO) and the state would be obliged to settle these costs.
Considering that the restructuring of the shipyard involved the construction of a mega-marina and business and tourist zone it will be necessary to adjust the physical planning of Split-Dalmatia County which will require building permits. Koncar has insisted that the text of the contract incorporates that if the permits are not issued that these should be facilitated with the law on strategic investments currently in the pipeline.
The European Commission on 20 March approved the amended plan to overhaul the shipyard, which paved the way for the signing of the sales contract between the government and the Kermas company.
