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Croatia's troubled Uljanik shipyard picks partner to stay afloat

Thu 7th February, 2019 1:19pm
ZAGREB, Feb 7 (Reuters) - Croatia's troubled shipbuilder
Uljanik  ULJN.ZA  said on Thursday it had chosen local rival
Brodosplit as a strategic partner to restructure its operations.
    Uljanik, 25 percent owned by the state and with 3,500
employees, has been working to stave off bankruptcy due to
liquidity problems that began in 2017. Workers staged strikes
twice last year over unpaid wages.  urn:newsml:reuters.com:*:nL8N1X21W5
    "Uljanik has chosen Brodosplit as its strategic partner
which will have an obligation to devise, in cooperation with
Uljanik, a feasible restructuring plan," Uljanik said in a
statement filed to the Zagreb bourse.
    "The chosen partner will be able to enter the ownership
structure through a capital boost," said Uljanik, which owns two
shipyards in the northern Adriatic cities of Pula and Rijeka.
    Uljanik, whose shareholders also include local banks and
insurer Croatia Osiguranje  CROR.ZA , did not give a value or
other details of the strategic partnership. Brodosplit also
declined to give details.
    Economy Minister Darko Horvat said on N1 television news
channel on Thursday that Italian shipbuilder Fincantieri
 FCT.MI  was working with Brodosplit on the offer, without
elaborating.
    A source close to the matter told Reuters that Fincantieri
would act as an adviser to Brodosplit at this stage but would
not be an investor.
    The economy minister has previously said restructuring
Uljanik could cost about 800 million euros ($907 million), with
at least half the amount expected to come from a strategic
partner.
    Croatia's once-prosperous shipbuilding industry has
struggled since the collapse of Yugoslavia in the
early 1990s. It has lost business to competitors, particularly
in South Korea and other Asian nations.
    Croatia has spent more than 30 billion kuna ($4.6 billion)
in the past 25 years to save and then sell state-owned
shipyards. Brodosplit was among those sold by the state.
    The government paid out 2.5 billion kuna last year on state
guarantees to help Uljanik stay afloat, driving the budget into
deficit in 2018. Final budget figures for 2018 are due in April.
    An association of tax payers, Lipa, said on Thursday the
government was irresponsible in pouring money into a shipyard,
when there was no certainty that it could recover.
    "Each job in Uljanik cost citizens one million kuna," Lipa
said.
   
    ($1 = 6.5361 kuna)
    ($1 = 0.8824 euros)

 (Reporting by Igor Ilic
Additional reporting by Giulio Piovaccari
Editing by Edmund Blair)
 ((igor.ilic@thomsonreuters.com; +385 1 4899 970; mobile +385 98
334 053;))
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