ZAGREB, Oct 27 (Hina) - The crisis on the world maritime market and the inherited high level of indebtedness is the reason for the business collapse of the Rijeka shipping agency "Croatia Line", the Ministry of Maritime Affairs,
Transport, and Communications said in a reply to an inquiry by MP Nikola Ivanis regarding the collapse of "Croatia Line". "Problems on the financial market of countries in transition" and budgetary limitations influenced the implementation of a programme of financial reorganisation and measures for preventing an uncontrolled bankruptcy of the company, Ivanis said. The grave mistakes in the transformation process and the wrong business policy of the once largest Croatian, internationally respected shipping agency caused its bankruptcy, Ivanis said, asking whether the management and the supervisory board or the Croatian Privatisation Fund, whi
ZAGREB, Oct 27 (Hina) - The crisis on the world maritime market and
the inherited high level of indebtedness is the reason for the
business collapse of the Rijeka shipping agency "Croatia Line", the
Ministry of Maritime Affairs, Transport, and Communications said
in a reply to an inquiry by MP Nikola Ivanis regarding the collapse
of "Croatia Line".
"Problems on the financial market of countries in transition" and
budgetary limitations influenced the implementation of a programme
of financial reorganisation and measures for preventing an
uncontrolled bankruptcy of the company, Ivanis said.
The grave mistakes in the transformation process and the wrong
business policy of the once largest Croatian, internationally
respected shipping agency caused its bankruptcy, Ivanis said,
asking whether the management and the supervisory board or the
Croatian Privatisation Fund, which was in charge of "Croatia Line"
for the past six years, would be held responsible.
The Ministry replied that the "management and the supervisory board
of 'Croatia Line' and the Croatian Privatisation Fund (HFP) have
taken all the necessary steps for the company to stay alive. "The
management and the supervisory board or the HFP cannot be held
responsible for the fall of freight on the world market as the
generator of losses or for the fall of market prices of ships which
are the company's most valuable asset", the Ministry said, adding
the reason for the collapse should be sought in the inherited high
level of short-term and long-term indebtedness, and not in the
company's privatisation, carried out in 1997.
The Ministry disputes Ivanis' claim that in 1992 "Croatia Line" was
a very stable shipping agency in market and financial terms. The
disintegration of the former Yugoslav market, where the company had
been realising more than one third of its income, jeopardised
'Croatia Line' as well. The agency had been recording major losses
since 1990. In 1992, the estimated market value of all Croatia Line
ships was US$297 million, which was roughly the value of the
company's debts, the Ministry claims.
At the time, the Government was not able to secure adequate
financial support for a programme of reorganisation of the company
due to the war, the Ministry said.
(hina) mm rml,