Through a capital increase of 67 million kuna, Viadukt plans to expand its scope of work in road construction in Croatia, although there are talks of possible jobs abroad, primarily in the Middle East. However, since the capital increase has not yet been registered in the court registry, it is unknown whether and to what extent the ownership structure has changed.
Written by: Amir Kulenović
[email protected]
Photo: Dražen Lapić
In the conditions of an unprecedented crisis in the capital market, of which the construction sector is the biggest victim, taking the average decline in stock prices as a reference, Zagreb’s Viadukt successfully raised 67 million kuna through a capital increase. The company plans to use these funds for investments needed due to, as stated in the call for capital increase, ‘increased volume of work’. However, this increase has not been reflected in the semi-annual report, nor have shareholders and the investment public been informed about it, so new jobs for Viadukt can only be speculated upon. Viadukt has gained most of its important references as a contractor for large infrastructure projects such as the construction of highways, bridges, overpasses, and accompanying infrastructure for the state giants Hrvatske ceste, HAC, the Rijeka-Zagreb Highway, and municipal branches of larger and smaller cities in the country.
High Dependence on the State
In the past year, the company has been seeking jobs abroad, with potential destinations mentioned as Ukraine and Russia, as well as the opening of Africa and the Middle East, where (at that time) Yugoslav construction operations were very present about twenty years ago. However, even there, they have long since discarded sympathies and mutual similarity as criteria for successful business, and price and quality, as everywhere in the world, have become the only criteria for obtaining jobs. Although the volume of work in civil engineering shows no signs of slowing down, the ailment of Viadukt, as well as several similar construction companies in Croatia, remains their dependence on the state as their largest client.
The fact is that such a pace of road construction in Croatia is not sustainable in the long term, and the Management, if it wants to be ready for a successful transition from a kind of state service to a regional construction company, should seriously consider entering foreign markets. As those familiar with the sector say, there is currently a ruthless battle among builders, especially regarding obtaining jobs from state companies, for several larger infrastructure projects that the state as a client plans in the coming years. The biggest competitors so far have been four companies – Viadukt, Konstruktor, Hidroelektra, and Osijek-Koteks, which have, as a public secret, been mutually sharing the most lucrative jobs.
However, due to reshuffling in the structures of power, where some companies have lost lobbyists, the balance of power among builders has changed, leading to a situation where some of them are entering into jobs with foreign companies, and increasingly, companies that were previously only subcontractors are appearing independently in tenders offering much lower prices. Until now, such a thing could not be imagined in jobs with the state, as it was well known who could be the main contractor and who was ‘only’ a subcontractor.
Number of Shares Increased by 50 Percent
Last year, Viadukt opened a subsidiary in Abu Dhabi, likely counting on the fact that construction is gaining more and more momentum in that part of the world, and serious consideration is being given to obtaining valuable jobs in Libya. However, for now, everything remains just plans that no one from the Management has been willing to elaborate on in detail. Judging by several tenders in BiH, where Viadukt has regularly lost, citing prices about 20% higher than the best bidders, the transition from semi-agreed road construction in Croatia to the real market conditions prevailing abroad will be very difficult for them to achieve. At the helm of Viadukt’s Management is Joško Mikulić, but informed sources claim that his role in managing the company is less significant as the main voice is held by members of the Management and more important small shareholders, financial director Ivan Berket and technical director Damir Kezele when it comes to negotiating jobs. Regarding ownership relations in the company and who gives the Management orders for business, there is considerable secrecy.
Namely, ownership is quite dispersed, as the largest ten shareholders hold 47% of the company, while the rest is spread among a total of 1,400, so it is unclear to whom the Management must answer for strategic decisions. There were once rumors that the company was preparing for sale – potential buyers included the Austrian Strabag and Nexe group, but no one has shown interest that would manifest through stronger trading on the stock exchange. Moreover, Viadukt’s shares are among those that have suffered the most in the stock market crisis – from a record 4,800 kuna last October, it has fallen to less than a thousand kuna, which is what can be obtained for Viadukt these days.
