CERP Confirms: Iskra Submitted Offer to Purchase 3. Maj Rijeka 1905

From the Center for Restructuring and Sale (CERP, it was learned on Monday that one binding offer has been received in response to the public call for binding offers for the purchase of the company 3. Maj Rijeka 1905, owned by the Republic of Croatia, and the Šibenik-based Iskra Shipyard confirmed that they have submitted a binding offer.

In response to Hina’s inquiry, CERP stated that, in the process of selling the business shares of the company 3. Maj Rijeka 1905, one binding offer was received within the deadline for submission, which is in accordance with the conditions of the published public call.

The President of the Management Board of Iskra Shipyard Roko Vuletić stated for Hina that they have submitted a binding offer and previously conducted a serious due diligence analysis of the company. When asked about their plans, he said that they believe operational and financial restructuring is necessary for the company and that they plan to continue and expand cooperation with the client from the Scenic group, pivoting towards production for the defense industry, including the production of corvettes, as well as towards the production of environmentally friendly passenger ships.

He mentioned that investments are needed in 3. Maj Rijeka 1905, that there are high overhead and operational costs, and that there is a lack of quality long-term contracts, but they believe that there is a core team in the shipyard ready for change. Vuletić also added that they are aware of a potential legal issue following the request of the bankruptcy trustee of the ‘old’ 3. Maj for a ban on disposing of shares in 3. Maj Rijeka 1905, but that, given that the state is on the other side, they believe that this will be resolved before the contract is signed so that all risks for the investor are eliminated.

The Iskra Shipyard from Šibenik is a ship repair yard specialized in the repair of all types of vessels up to 80 meters in overall length and for the repair of newly built vessels up to 60 meters in overall length, and is owned by the Slovenian Iskra.

CERP published a public call for binding offers for the purchase of three business shares of the company 3. Maj Rijeka 1905, owned by the Republic of Croatia, with the condition of retaining shipbuilding activities, on September 17, and the deadline for submitting offers expired today at 12 PM. The starting price for all three shares, representing a 100% share in the share capital, was €6.6 million, and the total nominal value is approximately €10.3 million.

The company 3. Maj Rijeka 1905 was established as a subsidiary of 3. Maj Shipyard d.d., which is now in bankruptcy, and has continued shipbuilding activities at the same location and contracted new jobs.

The bankruptcy proceedings against the ‘old’ 3. Maj were opened at the Commercial Court in Rijeka in May. Creditors accepted the report stating that the assets would not be sufficient to cover claims, agreed to the liquidation of movable property, and that the operations of 3. Maj would not continue. The bankruptcy trustee stated at the first hearing in September that the bankruptcy debtor, in the process of increasing the share capital, transferred certain assets, namely the production facility and certain real estate, to 3. Maj Rijeka 1905, and that this property was later transferred to the Republic of Croatia for the purpose of offsetting claims.

According to the report of the bankruptcy trustee published a few days ago, the bankruptcy trustee of 3. Maj, Loris Rak, filed a lawsuit against the Republic of Croatia to challenge the Agreement on the Transfer of Business Shares and the Agreement on the Settlement of Part of the Claims, by which the state became the owner of the subsidiary 3. Maj Rijeka 1905, and a proposal was also submitted to secure the claim by adopting a temporary measure.

“After unanswered offers to the authorized bodies of the Republic of Croatia for an amicable resolution of the dispute, and considering that this creditor is selling the subject of the bankruptcy estate, which was acquired through legal actions whose validity is being challenged, the bankruptcy trustee filed a lawsuit against the Republic of Croatia and at the same time a proposal for securing his claim by adopting a temporary measure,” the report stated.

These are contracts that were initially concluded at the beginning of the year between 3. Maj and the Republic of Croatia, which regulate the settlement of part of the claims of the Republic of Croatia by transferring three business shares that 3. Maj had in the subsidiary 3. Maj Rijeka 1905, i.e., 100% of the share capital of the subsidiary amounting to €10.3 million, to the state. The government made the decision on the settlement of part of the claims of the Republic of Croatia against 3. Maj, by transferring the business shares of its subsidiary 3. Maj Rijeka 1905 to the state and the decision on the transfer of the concession to that company last December.