REHABILITATION OF RIJEKA'S 3. MAJ SHIPYARD TO END BY DEC 31

RIJEKA, Dec 15 (Hina) - The Council of Creditors of the '3. maj' Group on Friday adopted a decision on the completion of rehabilitation of the Rijeka-based '3. maj' shipbuilding company and other companies from the '3. maj' Group by December 31 this year. Economy Minister Goranko Fizulic informed reporters about this decision at a news conference in Rijeka. The decision means that '3. maj' will be the second Croatian shipyard (after Uljanik) to start operating after five years without the protection of the Law on the Rehabilitation of Some Companies, i.e. as all other companies, paying their obligations. Adequate decisions have helped cover losses and renew the company's stock capital and establish a new shareholders' structure with the biggest shareholders being the company's creditors- rehabilitators: the Croatian Privatisation Fund, State Agency for Deposit Insurance and Bank Rehabilitation, Croatian Pension Insurance Institute, Croatian Health Insurance Institute and the City of Rijeka as well as small shareholders. The shareholders will hold an assembly in the first half of February 2001, when a new supervisory committee will be elected. The company's management informed Fizulic, who chairs the Creditors' Council, that the company had delivered two ships worth US$70 million this year. The shipyard is expected to deliver another four US$130-million-worth ships in 2001 and five US$140 million-worth ships in 2002, they said. Financial results this year will be ones of a loss and the company is expected to make profit with the help of planned state subsidies in coming years. Production results in the second half of this year are much better because delays and insured financing have been eliminated, which will continue in coming years as well, the company's management said. According to Fizulic, the company's revised losses in 1999 amount to 470 million kuna, and in the first six months of this year they amounted to 177 million kuna, which is much more than the management had reported. It is expected that with subsidies worth 80 million kuna or 15 percent of the overall annual income the company would operate without losses in the second half of this year. Losses are not expected next year either, when state subsidies will be reduced to seven percent, Fizulic said. In 2002, the company should realise profit with an income of 1.25 billion kuna and state subsidies of seven percent, he said. Asked about the completion of the rehabilitation process in other large shipbuilding companies, Fizulic said everything was proceeding as planned and the process of rehabilitation of the Brodosplit and Kraljevica shipyards should be completed by the end of December as well. As to the Brodotrogir shipyard, it is still not certain when the process of rehabilitation will end, Fizulic said. (hina) rml