Jadran plans to list shares on the Zagreb Stock Exchange

The assembly of the hotel and tourism company Jadran on Monday tasked the Management Board to list all more than 49 million shares with a nominal value of 10 kuna on the official market of the Zagreb Stock Exchange, reported the Management Board of Jadran, while the Association of Creditors of former Jadran workers assessed that the only long-term sustainable and quality model of privatization is the sale of a majority stake to a strategic partner who should also offer to buy back shares from minority shareholders.

The assembly of Jadran today authorized the Management Board to list all more than 49 million shares with a nominal value of 10 kuna on the official market of the Zagreb Stock Exchange. This, they say in Jadran, was also the initial request of minority shareholders, considering that shareholders became satisfied with the settlement of 50 percent of their bankruptcy claims.

The Management Board of Jadran announced today that they will immediately start preparing the documentation necessary for the listing of shares on the stock exchange and that they expect the listing after the New Year.

Representatives of the majority shareholder, namely the Republic of Croatia, which holds about 80 percent of the shares and is represented by the Center for Restructuring and Sale, as well as some minority shareholders, participated in the General Assembly. The assembly also decided that last year’s profit of 2.6 million kuna will be allocated to retained earnings, which now totals 8 million kuna, and that the share capital will be increased by 542,000 kuna. The assembly granted discharge to the Management Board and the Supervisory Board, and the auditor’s report was also accepted.

The decision to increase the share capital was made considering that the Management Board continues to implement the bankruptcy plan under which creditors of the first higher payment order, namely former and current workers, are satisfied by having 50 percent of the debt paid in shares and 50 percent in cash. As emphasized by Jadran, the Management Board paid workers 30.5 million kuna in cash in July, two and a half years ahead of schedule, and the increase in share capital relates to creditors who agreed to such settlement after the conclusion of the bankruptcy proceedings, reached an agreement, and terminated legal disputes.

The Association of Creditors of former Jadran workers stated after the assembly that they are satisfied that all claims have been paid in cash for about 850 workers of bankruptcy creditors. After that, the workers, bankruptcy creditors, withdrew an extraordinary review at the Supreme Court of the Republic of Croatia in early August, which they hope will remove one of the obstacles for a faster start of privatization. They believe that Jadran is undercapitalized and that it needs significant investments.

They believe that the legal disputes between 70 workers of separate creditors and Jadran should be resolved by reaching a court settlement that would end the legal disputes and propose that they be paid the principal in full, default interest up to the day of payment, with the possibility of an agreement on the payment of a smaller part of the claims in shares of the company after the listing on the stock exchange, and that all legal and attorney fees be covered by Jadran.

The association believes that the listing of Jadran’s shares on the Zagreb Stock Exchange would reveal the market value of the shares and open the possibility for more serious negotiations between the Management Board and the Association regarding the resolution of current legal disputes.

They emphasize that Jadran’s share capital is estimated in this year’s strategic development plan at 150 million kuna, which is significantly lower than the estimated value of 490 million kuna in Jadran’s bankruptcy plan from 2013.

The Association believes that the model of recapitalization of the company by management companies of mandatory pension funds in Croatia is only a temporary solution for the continuation of the initiated investment cycle, and that the only long-term sustainable and quality model of privatization is the sale of a majority stake in Jadran to a quality strategic partner as a whole, through a public tender and at a market-acceptable price.

They consider that the best way to protect the interests of 850 former and current workers and minority shareholders is to list Jadran’s shares on the Zagreb Stock Exchange, as this would obligate the buyer of the majority stake to offer to buy shares from minority shareholders.