GOVERNMENT TO HELP RIJEKA SHIPYARD WITH 2.5 MILLION EUROS

ZAGREB, July 10 (Hina) - The Croatian government decided on Thursday to secure 2.5 million euros for the financial consolidation of the Viktor Lenac shipyard in the northern Adriatic city of Rijeka, Deputy Prime Minister Slavko Linic told reporters. #L# The government also accepted other points of the agreement between the shareholders and the creditors -- that the Managing Board should have five members and that each financial document should contain the signatures of two members of the Managing Board. The state will increase its supervisory role as one member of the Supervisory Board will be from the Croatian Bank for Reconstruction and Development (HBOR), which is the shipyard's important creditor. The course of the talks between the creditors suggests that the current chairman of the Managing Board, Damir Vrhovnik, should not remain in that position, Linic said. The government will provide the 2.5 million euros as soon as we see that the relevant bodies of shareholders and creditors have confirmed their commitments, he said. Linic was unable to specify how this amount would be raised, saying that it remained to be seen whether the government would secure the funds through loans from the HBOR or commercial banks. He said that the agreement signed by the shipyard's creditors and shareholders was expected to be approved by the relevant bodies of creditors and shareholders within the next 60 days. Under that agreement, about 23.7 million euros in long-term loans will be converted into the stock capital, 19.1 million in short- term and new loans into favourable long-term loans to be repaid over a period of 15 years with a grace of nine years, while 6.7 million euros will go into equity. In that way about 28 million euros of fresh money will be secured for debts, workers' wages and completion of the second investment cycle in the shipyard. (hina) vm sb