Problems Continue at Uljanik Shipyard

Uljanik Shipyard

Croatian government officials will have tough decisions to make as the fate of Uljanik shipyard hangs in the balance.

Fixing an ongoing situation at the yard could cost up to 1 percent of the country’s GDP, according to S&P Global Ratings.

"In particular, the resolution of the troubled Uljanik shipyard, which is currently in search of a strategic investor and could otherwise face bankruptcy, could cost the government up to 1% of GDP. The precise cost however depends on the final scenario, and the possible finalization of ships under construction," S&P wrote. 

After financial problems over the winter, the yard received a 96 million euro loan from the Croatian government and found a new investor in Kermas Energija, although that deal is said to still be pending.

Summer brought more challenges, as the yard struggled to meet July payroll, which was then met with a worker strike in late August while Chairman Gianni Rossanda offered his resignation. 

Now Croatian officials are weighing three different options that will affect thousands of jobs.

The easiest of those solutions would be to find a new strategic partner, or adopt a restructuring plan that is approved by the European Commission and Croatian government, enabling loan guarantees. Finally, officials are also weighing declaring the yard insolvent.

The Scenic Eclipse is under construction at Uljanik and slated for a January 2019 delivery, pushed back from August 2018. The company also has a second ship due for a 2020 delivery.

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