China May Invest in Struggling Croatian Shipbuilder

File image courtesy Uljanik

By The Maritime Executive 05-01-2019 06:06:31

The government of Croatia is hoping to interest Chinese shipbuilding giant CSIC in investing in two near-bankrupt shipyards, Uljanik and 3. Maj (May 3).  

The two yards, both owned by specialty shipbuilder Uljanik, face serious financial difficulties and have been in a state of turmoil since last summer. The Croatian government is attempting to determine a way to restructure them but has not yet found a viable proposal. In March, Croatian Prime Minister Andrej Plenkovic turned down a bailout plan that would have cost the government as much as $1.5 billion, citing the cost. The government is now seeking an investor to turn the troubled shipbuilder around. 

Plenkovic discussed the matter of a Chinese investment in Uljanik with Chinese Prime Minister Li Keqiang during a recent visit to Zagreb, and Li arranged for representatives from state-owned CSIC to examine the possibility. On April 29, CSIC chairman Hu Wenming and a delegation of Chinese officials arrived in Croatia to talk with Plenkovic about investment opportunities at the two yards. 

On Tuesday, the CSIC leaders met with Uljanik's managers and board members in the town of Pula. "I am glad to see that there are people who are interested in both shipyards, considering the situation we are in," said Uljanic supervisory board member Samir Hadži?. He told local media that the discussions had focused on Uljanik's specialty-shipbuilding business and had not gone into the details of financing. 

Uljanik has been a source of considerable controversy in Croatia since its decline began. In March, Croatian police arrested a dozen former executives of Uljanik Shipyard over alleged "abuse of trust in financial transactions" and fraud. Officials allege that the scheme cost the Croatian government more than $150 million. The lawyer for the yard's former president, Gianni Rossanda, asserted that the arrests were politically motivated and intended to deflect public attention from the yard's distress.