ZAGREB, April 6 (Hina) - Croatia's Government on Thursday decided to issue new bonds which should replace old ones, given in 1991 without interest rates, in order to improve the solvency of 15 banks. The value of old bonds was 89.3
million kuna (approximately 11.16 million US dollars). The new bonds which replace them should directly help the recovery of the banking system. In this way seven banks - Cibalae, Dalmatinska, Istarska, Jadranska, Karlovacka, Pozeska and Sisacka - should get recognised supplementary income of 89.3 million kuna, and of it the Istarska bank will receive 57.5 million kuna (about $7 million). A Vice Premier, Slavko Linic, explained that the Istarska bank would thus have no longer negative capital and there were no more reasons for a temporary trustee or for the application of other legal instruments of the Croatian National Bank (HNB) aimed at solving problems in ban
ZAGREB, April 6 (Hina) - Croatia's Government on Thursday decided
to issue new bonds which should replace old ones, given in 1991
without interest rates, in order to improve the solvency of 15
banks. The value of old bonds was 89.3 million kuna (approximately
11.16 million US dollars). The new bonds which replace them should
directly help the recovery of the banking system.
In this way seven banks - Cibalae, Dalmatinska, Istarska,
Jadranska, Karlovacka, Pozeska and Sisacka - should get recognised
supplementary income of 89.3 million kuna, and of it the Istarska
bank will receive 57.5 million kuna (about $7 million).
A Vice Premier, Slavko Linic, explained that the Istarska bank
would thus have no longer negative capital and there were no more
reasons for a temporary trustee or for the application of other
legal instruments of the Croatian National Bank (HNB) aimed at
solving problems in banks' operations.
Linic added that this move actually corrected mistakes made in 1992
when interest rates were not recognised for those (old) bonds. New
bonds will be issued with the five-percent interest rates and
maturity in 2011. Annual rates for them total 150 million kuna
($18.75 million).
Concerning problems in the Istarska and Cibalae banks, the
Government advised share-holders and supervisory boards to
conclude contracts with strategic partners, within 60 days, on the
injection of fresh capital of these regional banks, increase their
own share in the banks' capital and sell a part of the ownership'
portfolio. Depositors and clients are protected by the decisions,
Linic said.
After Thursday's session, Premier Ivica Racan announced that the
Government would soon consider proposals for settling the
government's debts toward companies.
The Government wants to solve important problems, but hasty
pressure does not help the Government's efforts. In this context he
cited examples of firms workers of which are coming in front of the
Government's offices and demand from state authorities to settle
problems immediately and pay salaries at once, regardless whether
they can do it or whether it is in the Government's jurisdiction.
The Government must resist such attempts of pressure and will not
allow that problems be solved in the old manner, Racan added.
The Government decided to resume the construction of sections of
the Zagreb-Gorican motorway, said Minister of Public Works and
Construction, Radimir Cacic.
The Government stuck to the proposal to postpone the enforcement of
the new children's allowance law for the beginning of 2001, because
all conditions for it to go into effect have not been fulfilled. The
Government reiterated this stance after the Sabor's House of
Counties asked the lower chamber - the House of Representatives - to
hold another discussion on an act on the suspension of the new
children's allowance law.
The Government called an election for the city assembly of Zagreb
for May 7 (Sunday).
(hina) mm ms