Debt of CA to the State Converted into Equity Stake

The government accepted the decision to convert nearly 80 million kuna of state receivables into an equity stake in Croatia Airlines at today’s session, as the second of three tranches of recapitalization of the national airline as part of the restructuring program.

The equity capital of Croatia Airlines will thus increase by 79.87 million kuna of state receivables, to 1.9 billion kuna, and the Minister of Maritime Affairs, Transport and Infrastructure, Siniša Hajdaš Dončić, explained that this is necessary for the survival of Croatia Airlines.

The increase in the equity capital of Croatia Airlines by incorporating the state’s rights based on receivables, he added, is in accordance with the financial and operational restructuring plan of this airline recently approved by the Competition Protection Agency.

Furthermore, the government agreed that the relevant ministry will conclude contracts with Croatia Airlines and Trade Air d.o.o. for the provision of domestic scheduled air transport, and Hajdaš Dončić stated that these contracts are necessary for the preservation of domestic air traffic on routes of interest to the Republic of Croatia.

The government awarded a 25-year concession on cadastral parcels in the municipalities of Škrljevo and Kukuljanovo, with a total area of 337.6 thousand square meters, for the establishment of the Free Zone Port of Rijeka – Škrljevo. This will, said the Minister of Entrepreneurship and Crafts, Gordan Maras, further increase the storage capacity of the Port of Rijeka, and the revenue from the concession, estimated at around one million kuna annually, will be shared equally between the City of Bakar, where the mentioned cadastral parcels are located, and the state.

The government also accepted a notification of the intention to grant a 30-year concession on 63.3 thousand square meters of land and marine area in the municipality of Tisno for the purpose of constructing and economically utilizing a nautical tourism port in Uvala Luka, for which offers will be collected by the Ministry of Maritime Affairs, Transport and Infrastructure.

With the accepted amendment to the final proposal of the law on the collection of tax debt caused by the economic crisis, the calculation of interest rates on the reprogramming is changing, which until now amounted to about 10 percent (interest on one-year treasury bills of the Ministry of Finance plus 5 percent), and it is now expected to range from 6 to 12 percent, depending on the collateral provided (the reference interest rate of the European Commission plus a margin related to the value of the collateral).

By the government’s decision, the signing of a Memorandum of Understanding between the EU and Croatia regarding the conditions of Croatia’s participation in Union programs for 2013 was also accepted, which sets the membership fee that Croatia is obliged to pay for participation in the programs at 111.46 million kuna, of which about 73 million kuna will be paid from the state budget, and the remainder from the EU grant.