Only two valid bids for Croatian shipyards

There were only three bids at the international tender for the six state-owned shipyards that closed on Wednesday at the Croatian Privatization Fund (HFP).

The government is selling two of the shipyards at market price while the other four will be sold for 1 kuna each, about 20 U.S. cents. The catch is that the buyer must either cover the yards’ considerable debts or commit to invest in the yards.

The Adria Mar company in Zagreb is interested in Split-based Brodosplit BSO shipyard for 5 million kuna (about $1 million) and invest 13 million kuna to restructure it. Another local firm, More Trogir, is interested in Brodotrogir shipyard in Trogir and turn it into an apartment and tourist facility. It was not immediately clear whether the offers would be accepted.

The company Regulacija from Vukovar had shown an interest in Rijeka shipyard 3.maj, but its offer was rejected as invalid.

Despite the poor response, Croatian deputy prime minister and economy minister Damir Polancec said the process of shipyard restructuring would continue because there was no alternative. Polancec said: “We will continue with restructuring through the privatisation process, and the government, the ministry and the Croatian Privatization Fund will prepare in the shortest possible time a second round of tendering.” If no investor comes up, the shipyards will have to file for bankruptcy, he said.

Croatia, a front-runner to join the European Union, was told by Brussels that it must sell its heavily subsidized shipbuilding industry in order to become a member. The six shipyards, three on the north of Croatia’s Adriatic coast and three in the south, employ some 12,000 people, while tens of thousands depend on the industry directly or indirectly. Once the country’s second-largest hard-currency earner after tourism, the Croatian shipbuilding has now for years depended on government subsidies to keep the docks operating.

Croatian media has reported that the other potential purchasers withdrew from the tender at the last minute claiming there was too much vagueness in documentations and that no one really is familiar with the shipyards condition.

Labour union leader, Ozren Matijasevic, said the result of the tender shows that the timing was not right for the sale and urged the government to abandon the sale.