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Uljanik Shipyard's Holding Company Liquidated by Creditors

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Skyline at Uljanik Shipyard (file image)

By The Maritime Executive 01-22-2020 06:08:00

The creditors of financially-distressed shipbuilding holding company Uljanik d.d. voted Wednesday to liquidate its assets.

The vote ratifies a plan prepared by the company's bankruptcy administrator, Marija Ruzic, who recommended liquidation given that Uljanik d.d has no operating income and does not expect any in the near future. In addition, its liabilities exceed its assets by a factor of three. Auctions will begin this year through the state-owned financial mediation company FINA. 

The decision excluded assets required for a "revival of shipbuilding in Pula." The Croatian government - Uljanik d.d.'s largest creditor - will have input on the physical shipyard's fate, including the question of further financial support. 

Uljanik has been in a state of financial crisis since July 2018, despite government assistance. Its difficulties were allegedly worsened by high-level corruption: Last year, Croatian police arrested a dozen former executives over alleged "abuse of trust in financial transactions" and fraud. Officials allege that the scheme cost the Croatian government more than $150 million. At the time, the lawyer for the company's former president asserted that the arrests were politically motivated and intended to deflect public attention from the yard's distress.

Uljanik Group operates two shipyards, one in Pula (Uljanik) and another in Rijeka (known as 3. Maj, or "Third May Shipyard"). As of 2019 it had about 4,000 employees between the two sites. 

With government assistance, 3. Maj has seen some success in financing and continuing its operations. In September, it re-started a $36 million agreement with Canadian shipping firm Algoma after a period of cancellation. The agreement followed a $22 million loan from the Croatian Bank for Reconstruction and Development (HBOR) to help the company complete vessels currently under construction. 

Last year, 3. Maj delivered the $230 million luxury expedition cruise ship Scenic Eclipse, which garnered a warm reception from the cruise industry press and the cruising public. In December, the company won a contract to build a sister ship to the Scenic Eclipse - its first new order in four years. Keel-laying is scheduled for the second quarter of this year. 

Competing Croatian shipbuilder Brodosplit has recently acquired a new partner, Norwegian cruise and specialty shipbuilder Kleven Werft, which has been purchased by the holding company DIV Group. Kleven will retain its name and identity as part of the DIV Group portfolio.