Croatia to sign privatisation contract for Brodosplit shipyard by end-Feb.

By bne IntelliNews January 22, 2013
The European Commission has approved the text of the contract on the privatisation of Croatias Brodosplit shipyard and the government is expected to sign the deal with the buyer -local screw manufacturer DIV, on Feb 28, 2013, news agency HINA reported, quoting economy minister Ivan Vrdoljak as saying. He was speaking after meeting the European Commissioner for Competition, Joaquin Almunia on Monday, Jan 21. The final version of the contract envisages that the governments payments to the shipyard will be extended from three to five years and the governments total costs will be increased from HRK 1.263bn (EUR 167mn) to HRK 1.5bn. The planned amount of state support to Brodosplit this year was cut to HRK 480mn in the final version of the contract from initial HRK 600mn. The government has delayed the signing of the Brodosplit shipyard sales contract with local company DIV for several months as it wanted to first make sure it has the financial resources to cover the state subsidy claims of the new owner for the docks restructuring. In September, the government has decided to turn the Brodosplit shipyards debt of HRK 1.2bn (EUR 162mn) into equity, aiming to eliminate all obstacles to its privatisation. The cabinet of former PM Ivica Racan, ruling in the period 2000-2003, had decided to take over the debt of the shipyard and turn it into equity but the next government failed to implement this measure. In August, the EC approved the amended programme for the restructuring of Brodosplit, as well as the draft contract on its privatisation. In March 2012, the government decided to sell the Brodosplit shipyard to DIV, which was chosen because it intends to be engaged in shipbuilding, while the fact that it is a local company was not irrelevant as well. DIV generated total revenue of EUR 60mn and a HRK 45mn (EUR 6mn) profit in 2011.
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