ZAGREB, Feb 22 (Hina) - The Croatian government on Thursday put up collateral to the Rijeka-based shipyard Viktor Lenac for a EUR22 million long-term loan. The government believes this shipyard has to be helped to overcome current
financial difficulties. The government bound the Finance Ministry to ensure said collateral well. The conditions the government set include a mortgage, ensuring due bills, and reducing salaries for the management board to the level of ministers' salaries, i.e. salaries paid in state-owned companies. According to the media, Viktor Lenac chairman of the board Damir Vrhovnik's salary exceeded 160,000 kuna (approx. US$18,800). Vrhovnik's contract sets his net salary at US$16,000, which means that salaries at the management board will be reduced seven to ten times. Viktor Lenac hit hard times when the Danish company Alcatel on Feb. 14 unilaterally terminat
ZAGREB, Feb 22 (Hina) - The Croatian government on Thursday put up
collateral to the Rijeka-based shipyard Viktor Lenac for a EUR22
million long-term loan. The government believes this shipyard has
to be helped to overcome current financial difficulties.
The government bound the Finance Ministry to ensure said collateral
well. The conditions the government set include a mortgage,
ensuring due bills, and reducing salaries for the management board
to the level of ministers' salaries, i.e. salaries paid in state-
owned companies.
According to the media, Viktor Lenac chairman of the board Damir
Vrhovnik's salary exceeded 160,000 kuna (approx. US$18,800).
Vrhovnik's contract sets his net salary at US$16,000, which means
that salaries at the management board will be reduced seven to ten
times.
Viktor Lenac hit hard times when the Danish company Alcatel on Feb.
14 unilaterally terminated a contract on changes to the ship Kraka.
It is uncertain how long arbitration proceedings in Copenhagen will
last.
Collateral was put up for a EUR22 million loan for current assets,
including EUR11 million loaned by the Raiffeisen bank, one of the
shipyard's stockholders, and another 11 million from Privredna
Banka Zagreb.
The government maintains that by putting up collateral it has
demonstrated that it cares for the domestic company and the fate of
around 1,200 people employed at Viktor Lenac, and now expects an
answer from the shipyard's owners.
According to ownership data on Viktor Lenac at the end of last year,
27.16 percent is owned by B.V Beleggingsmaatschappij Ella, 17.67
percent by IFC (from the World Bank group), 12.56 percent by
Austria's Raiffeisenbank, 6.39 percent by Germany's DEG and the
Montiron Shipping Corporation, 4.22 percent by the Rijeka-based
I.H.F. and 22.68 percent by the employees.
Given that Viktor Lenac is privately owned, the government has
recently been reproached for intending to issue collateral to a
private firm. In this context special accent was placed on private
ties between some government members and the shipyard's chairman of
the board, but the government rejects such objections.
The Viktor Lenac case nevertheless urged the government to say
yesterday that it would draw up criteria for helping private
companies facing similar financial hardships.
(hina) ha sb