UVBRIMD Jadran: In privatization, hotel operations must be preserved

The Association of Creditors of former workers and small shareholders of Jadran d.d. Crikvenica (UVBRIMD Jadran) has once again sent a note to the public ahead of the upcoming signing of the privatization contract for the Jadran hotel, advocating for the preservation of the company’s integrity over the next five years and the continuation of hotel operations.

>>> Creditors and small shareholders of Jadran for quick privatization and new Management

The Association hopes that the recapitalization of 200 million kuna will contribute to better business results in the upcoming tourist season and that the price of Jadran shares will significantly increase, thereby creating conditions for the payment of claims of 850 former creditor workers.

We convey their statement in full:

UVBRIMD JADRAN believes that in the case where the Management Board of CERP made the Decision on November 22, 2017, to sell the hotel company Jadran d.d. for 1/3 of the stated value of real estate in the company’s balance sheet for 2017, additional conditions for buyers of the majority stake in Jadran d.d. in the purchase agreement between the buyers of the majority stake in Jadran d.d. and the current majority owner of Jadran d.d. (80% state of Croatia, i.e., CERP) should ensure the continuation of hotel operations in Jadran d.d. in such a way that the buyer submits a “Business plan, investment and development of the Company, aligned with spatial plans,” i.e., to ensure the integrity of the company within a period of 5 years (prohibitions on the division of the company among buyers, i.e., prohibitions on the sale of the entire company and individual sales of the company’s hotels during that period), since the hotel company Jadran d.d. is the bearer of organized tourism and the largest hotel company in the City of Crikvenica and its surroundings.

>>> Shares of Crikvenica’s Jadran to be listed again on the Zagreb Stock Exchange from Wednesday

Before the listing on the Zagreb Stock Exchange in early January 2018, about 850 former creditor workers had, according to the bankruptcy plan of Jadran d.d. from 2013, over 30 million kuna in shares of Jadran d.d. at nominal value, and about 1000 veterans had around 20 million kuna in shares of Jadran d.d. at nominal value. We also hope that the recapitalization by buyers in the amount of 200 million kuna within 6 months of taking over the company, i.e., better business results in the 2018 tourist season, will significantly raise the price of Jadran d.d. shares on the Zagreb Stock Exchange and thus, since 850 creditor workers have been waiting for over 22 years to collect their claims based on wage differences and other material rights in Jadran d.d..

UVBRIMD JADRAN believes that the former Supervisory Board and Management of Jadran d.d. did not carry out investments from 2016 to 2018 in accordance with HTL Horwath Zg “Strategic Business Plan for the Development of Jadran d.d. 2016 – 2025,” in its implementation, as already in 2016 (one year before the deadline set by the strategic development plan) they began the renovation of the Esplanade Hotel, which was completed only on July 1, 2017, worth 42 million kuna for obtaining 38 rooms (price 150,000 EUR/room), which is suspected to be 2 times the average price per room for the renovation of 4* hotels. We also believe that the former Supervisory Board and Management of the company, by not adhering to the strategic development plan in practice and incurring a loss of 4.2 million kuna for the 2017 business year, irreparably compromised HTL Horwath “Strategic Business Plan for the Development of Jadran d.d. 2016 – 2025,” and therefore we propose that in cooperation with a new consultant, the Management of Jadran d.d. develop a new Strategic Development Plan for the company for the period until 2025.

>>> Crikvenica’s Jadran invites some former workers to a ‘reasonable settlement’

The position of UVBRIMD JADRAN is that the current court disputes between the workers of the separated creditors and Jadran d.d. should be resolved as soon as possible in such a way that a settlement is reached out of court by agreement between the authorized representatives of the creditor workers of Jadran d.d. in bankruptcy and the current Management of Jadran d.d., or that a settlement is reached, identical or more favorable for the workers of the separated creditors under the terms of the settlement reached on October 23, 2017, with 19 workers of the separated creditors who had registered mortgages on the Camp TN Kačjak in the amount of 1.9 million kuna. Such a court settlement would conclude the expensive, lengthy, and unnecessary court disputes of Jadran d.d. and the remaining approximately 40 workers – separated creditors, which are being conducted at the Commercial Court in Rijeka, the High Commercial Court in Zagreb, the Supreme Court of the Republic of Croatia in Zagreb, and the Municipal Court in Crikvenica, which Jadran d.d. is losing at all court instances. In this sense, UVBRIMD JADRAN is ready for negotiations with the new Management to achieve a settlement with the remaining 40 separated creditor workers out of court, which would be satisfactory for both the separated creditor workers and Jadran d.d..