EC approves changes to restructuring plan of Croatia’s shipyard 3.Maj

By bne IntelliNews June 20, 2013

The European Commission said it has approved the amendment to the restructuring plan of Croatian shipyard 3.Maj. The EC said in a statement on its website that any distortion of competition that may arise from the modest increase in the total amount of restructuring aid would be compensated by the additional compensatory measures, propose by the country.

Thus, with this approval the EC clears the way for the wrap-up of the privatisation of the yard by July 1, 2013, when the country will become an EU member state.

Croatia's EU accession act stated that shipyards in financial difficulty have to be privatised before July 1, 2013.

In 2011, the EC and the Croatian competition authority approved a restructuring plan for 3.Maj, which envisaged HRK 5.3bn (EUR 714mn) of restructuring aid. In June 2013, the country insisted on a modest increase in the restructuring costs and a proportional raise in the restructuring aid. The country proposed to withdraw the possibility for 3.Maj to trade production quotas with other shipyards.

The EC said that this measure will ensure a strict limitation of production and a permanent removal of part of the production facilities. Thus, it concluded that the additional compensatory measures address a potential distortion of competition, which would be triggered by the aid.

In addition, the contribution of 3.Maj's buyer, namely Croatian shipyard Uljanik, to the restructuring is real, free of state aid and after the increase still represents 40% of the total restructuring costs.

Uljanik has offered to pay HRK 1 for the 83.3% stake in 3. Maj and to provide HRK 75mn in guarantees for its restructuring plan. Uljanik’s takeover bid does not include the non-core business of 3.Maj.

Thus, the Croatian government approved a contract on May 3 to take over the ownership of four non-core businesses that belong to 3.Maj. These four companies are engines and cranes producer 3.Maj Motori i Dizalice, marine equipment maker 3.Maj TIBO, catering firm 3.Maj Ugostiteljstvo and business services company 3.Maj STM.

Related Articles

Croatia’s Brodosplit to build €110mn polar expedition ship

Croatian shipyard Brodosplit announced on June 12 it has signed an agreement to construct a polar expedition ship for US’s Quark Expeditions.  “This project is another example of ... more

Poland’s Enterprise Investors acquires Croatian grocery chain Studenac

Polish Enterprise Fund VIII, a private equity fund managed by Enterprise Investors, signed an agreement to acquire a 100% stake in Studenac, a network of neighbourhood grocery stores operating in ... more

Croatia raises €750mn in 10-year Eurobond

Croatia issued €750mn through a Eurobond maturing in 2028 at a yield of 2.898% and bearing a coupon rate of 2.700%, the government announced on June 7. Improving macroeconomic ... more

Dismiss