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CROS-R-A - Croatia Osiguranje Dd News Story

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Troubled Croatian shipbuilder draws interest from potential investors

Thu 17th January, 2019 12:41pm
ZAGREB, Jan 17 (Reuters) - Croatia's largest shipbuilder
Uljanik  ULJN.ZA , which is trying to attract investors to stay
afloat, extended a due diligence process until late next week
after drawing the interest of potential strategic partners.
    Croatia's Economy Minister Darko Horvat said four potential
investors were looking at Uljanik's business data and another
company was also interested, but did not elaborate. 
    "I expect at least two serious offers for Uljanik at the end
of this process which would then prevent its bankruptcy," Horvat
told reporters.
    Local media reported that there were potential investors
from Ukraine, Italy, Germany, China and Australia for Uljanik,
which is 25 percent state-owned.
    "Due to an additional interest voiced by potential investors
the management decided to extend a due diligence process until
Jan. 24. The deadline for submitting bids to become Uljanik's
strategic partner remains Jan. 25 by 2000 local time (1900
GMT)," the company said in a filing to the Zagreb bourse.
    Originally, the due diligence process was due to be
completed on Jan. 17. 
    The company has been on the brink of bankruptcy after facing
liquidity problems over the past 12 months, which led to two
strikes by its workers in the second half of last year over
unpaid wages.*:nL8N1X21W5
    Uljanik owns two shipyards in the northern Adriatic cities
of Pula and Rijeka. 
    In January last year the Croatian government helped it stay
afloat with state guarantees for a loan worth 96 million euros
($111 million), while previous governments guaranteed other
loans extended to Uljanik, which is now putting pressure on
public finances.*:nL8N1X41WX
    Under European Union state aid rules, no further state
guarantees or direct payments from the budget are allowed. 
    Croatia's once-prosperous shipbuilding industry has
struggled to survive since independence from Yugoslavia in the
early 1990s. It has lost business to Asian shipbuilders, such as
those in South Korea, missing opportunities to modernise and
produce more sophisticated vessels. 
    Local banks and the country's top insurer,
Croatia Osiguranje  CROR.ZA , also have stakes in Uljanik.

 (Reporting by Igor Ilic; Editing by Susan Fenton)
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