The Croatian Privatization Fund (HFP) on Saturday invited bids for the privatization of the six shipyards in majority state ownership. Bids are to be submitted by 2pm on September 30.
The government sells from 83.32 per cent to 99.53 per cent of its shares in four shipyards – Rijeka’s 3. Maj, Brodogradjevna Industrija Split, Brodotrogir and Kraljevica – for one kuna. The starting price for the sale of the 100 per cent stake in Brodosplit-Brodogradiliste Specijalnih Objekata is HRK 18.16 million, while the starting price for the 59.25 per cent stake in Pula's Uljanik, the country's most successful shipyard, is HRK 397.49 million.
The HFP will publish the tender in The Financial Times, The Economist, Lloyd's List and Norway's TradeWinds. Croatian embassies abroad and foreign embassies in Croatia have been notified of the tender.
Bidders need to meet several conditions – present a business plan for at least five years, which should provide for restructuring over a period of up to five years, and an investment plan specifying the amount needed for the restructuring, including technological modernization. In the case of Uljanik, prospective buyers may provide their own business and investment plans if they disagree with the business and development programme proposed by the shipyard's management.
Among the mandatory criteria is bidders' obligation to provide adequate compensation measures and cover at least 40 per cent of the total cost of restructuring. They must also undertake to inject fresh funds to ensure business operation and technological modernization and to cover losses.
Bidders must specify which part of the shipyard's liabilities covered by state guarantees they will take upon themselves and must provide a substitute guarantee issued by a first-class bank, while the remaining part will be taken upon by the Croatian government.
The mandatory criteria include the obligation by the bidder to harmonize a restructuring programme with the Competition Agency and the European Commission and to adjust the production capacity to the calculation of capacity for each shipyard, which will be prepared by the Economy Ministry after the privatization of all six shipyards.
Prospective buyers will also have to estimate and define the number of workers in each shipyard after the restructuring process and to assume the collective agreements for the periods for which they have been signed.
In addition to the mandatory criteria, bidders may take upon themselves the obligation to keep the existing number of workers, open new jobs or prove for any redundant labour in accordance with the existing laws.
Bidders may also enter into agreements with the social partners and propose to sell up to 25 per cent of shares to workers under special conditions within six months of the completion of recapitalisation. This will be possible in all the shipyards but Uljanik, where the government has instructed the HFP to sell 25 per cent of the shares to the workers under special conditions to be determined in a separate decision.
The bids will be selected by a commission made up of representatives of the government, the HFP, Hrvatska Brodogradnja-Jadranbrod, and the managing boards and trade unions of the shipyards. The final decision rests with the government.
Source: HINA news agency