Rejected Reduction of Share Capital

The shareholders’ assembly of the hotel company Sunčani Hvar did not accept the majority of the proposals from the Management and Supervisory Board for the restructuring of the company at today’s meeting in Zagreb, including the proposal to reduce the share capital. Among the accepted proposals was the one for the imminent sale of the Viro campsite and the Pjaca café for approximately 2.5 million euros, as these properties are not of strategic interest to the company.

This was reported to journalists after the assembly by Dragan Lazukić, the regional director for Southeast Europe and a member of the Supervisory Board of Sunčani Hvar, on behalf of the majority owner, Orco Property Group. Emphasizing that the Croatian Privatization Fund (HFP), which holds 32 percent of the company’s shares, rejected all proposals from the Management for the restructuring of the company, Lazukić stated that this is not a happy solution as it closes off potential sources of additional income that could help the company, but also jeopardizes the payment of salaries to employees and the settlement of some current obligations.

Adding that the HFP emphasized at last night’s meeting, prior to the assembly, that they would proceed with the forced collection of claims from Sunčani Hvar amounting to 15 million kuna (a loan for the payment of salaries, which was due by January 31 of this year), Lazukić said that this would certainly be an additional blow that could endanger the very existence of Sunčani Hvar, possibly leading it to bankruptcy. On this and other problems of Sunčani Hvar, the president of the HFP, Vedran Duvnjak, spoke to journalists during the assembly, emphasizing that they would ‘postpone’ the collection of that claim ‘for some time’.

He stated that the HFP cannot allow or support the proposed reduction of share capital from 731 million kuna to 219.3 million kuna, as this would call into question the HFP’s stake in the company, and the value of the assets that the HFP has in Sunčani Hvar would ‘drop’ to a negligible 70 million kuna. Additionally, the HFP did not support the proposal to amend the Statute, which would give the Management the right to dispose of real estate, as it could happen that the sale of these properties would be used to settle the company’s debts. Duvnjak also presented data from the audit report indicating that the stability of Sunčani Hvar’s operations in the upcoming period is questionable and that debts have increased from 2005 to the present to 538 million kuna or about 70 million euros.

Duvnjak also mentioned that the HFP proposed to Orco a redefinition of the shareholders’ agreement, and that, in the event of unresolved issues in that company, a new partner might be sought. Lazukić, on the other hand, said he heard about this from journalists and in the corridors, but nothing official. He confirmed that total debts are close to 70 million euros, but believes that Sunčani Hvar has potential, that it is not in any ‘large and unsolvable dilemmas’, and that Orco remains long-term interested in Hvar. He assessed that communication between the HFP and Orco, as well as Sunčani Hvar, has not been good from the very beginning. Regarding the shareholders’ agreement, he called on Prime Minister Kosor to publish it, as he heard that she announced something like that these days, adding that Orco and Sunčani Hvar have no doubts about it. (H)