Rejected Offers for the Sisak Pipe Mill, Podgora Hotels, and Imota

The Management Board of the Croatian Privatization Fund has rejected all submitted offers for the purchase of majority stakes in the Sisak Pipe Mill (VCS), Podgora Hotels, and Imota, and it has been decided that new tenders will soon be announced for all three companies under the same conditions.

A total of six offers were received for the tender to purchase 100 percent of the Sisak Pipe Mill at a price of one kuna, of which two (from C.I.O.S. and Commercial Metals International) were relevant, but they were also rejected due to non-compliance with the mandatory conditions of the tender. The offer from the Swiss company Commercial Metals International (CMI) was rejected because the signing of the purchase agreement was conditioned on additional due diligence, as well as because the proposed business plan was not in accordance with the restructuring conditions from the Stabilization and Association Agreement, said the Chairman of the Management Board of HFP and Deputy Prime Minister Damir Polančec.

The offer from Zagreb’s C.I.O.S. was rejected, Polančec emphasized, because they sent a supplement to the offer due to errors in the business plan, which cannot be accepted after the opening of all submitted offers. Polančec pointed out that he instructed the management of VCS to amend the disputed contract on the exclusive right to distribute pipes with the Italian company Pipex, a subsidiary of the Slovak steelworks Podbrezova, as soon as possible, or to remove the clause on significant compensation in the event of the privatization of VCS.

The offer from the Slovenian company Relax to purchase 51.17 percent of the shares of Podgora Hotels was rejected after the analysis of the offer determined that most of the proposed investment of 152.1 million kuna relates to settling the obligations of that company, which was a special condition of the tender, while any capital investments were conditioned on obtaining all necessary permits (location, construction, etc.). A credit analysis of Relax also determined that Relax is a high-risk company with negative capital.

The reason for the rejection of the offer from the Split Port Cargo Terminals for 98.73 percent of the shares of Imota, according to Polančec, is the ambiguities related to the request to release Imota from harmful contracts. Since the offer did not specify which contracts were involved, and HFP has no knowledge of such contracts existing, a new tender will also be announced for Imota, Polančec explained.

In addition to these decisions, at the meeting of the HFP Management Board, which had as many as 15 agenda items, it was decided that new tenders for the sale of majority stakes in companies for which there has been no interest in previous sale attempts or adequate offers were to be announced soon – Hotels Živogošće, Zdenačka Farm, Vupik, Bizovačke Toplice, ZRC Lipik, Trimot. The announcement of the tender for Dalmacijavino has been postponed for about ten days, by which time it should be known whether the State Attorney’s Office will reach a settlement with that company regarding the non-payment of the concession for the use of maritime property on which Dalmacijavino has some real estate.

The HFP Management Board also decided that the shares of the Županja Sladorana (5 percent), Split Lavčević (3.61 percent), and Zagreb Dioki (1 percent) from the state portfolio will be allocated without compensation to the victims of the Homeland War. It was also decided that former employees of Pliva, Dalekovod, Čazmatrans, and Transadria, who were mobilized during the war, will be granted the right to purchase shares of those companies under the conditions under which the companies were privatized.

A list of new shares for public auctions to cover capital expenditures of the ministries of the sea, tourism, transport and development, and justice has also been established, which includes shares of Apartments Medena, Ludbreg Development, ZEP, AgroIlok, Electropromet, Sladorana, and Ljudevit Posavski.    (Matilda Bačelić)