S&P: Uljanik Could Cost Croatia Up to 1% of GDP

The financially troubled shipyard Uljanik could cost the Croatian government up to 1% of its gross domestic product, according to a report by Standard & Poor’s ratings agency.

“Although we believe that contingent fiscal risks are contained, some state guarantees could be activated and fall on the government’s balance sheet,” S&P said.

“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.”

The rating report comes only days after Croatian shipbuilder Uljanik Group revealed its intention to sell 3. Maj shipyard in an effort to raise the much-needed funds.

However, the group informed that there are currently no legal procedures underway for the spin off of the shipyard, as the struggling company continues its search for much needed funds.

Uljanik added that no formal steps would be made on the matter until the restructuring program for Uljanik Shipyard is adopted.

The company was forced to restructure amid a downturn in the global shipbuilding industry coupled with rising competition on the Asian continent.

World Maritime News Staff