Since the government, which is represented by the Privatisation Fund (HFP) and the national agency for savings insurance and bank rehabilitation (DAB), will also join in the recapitalisation of the Suncani Hvar, the company's ownership structure will not change significantly, Polancec said.
The HFP and DAB will decide on their participation in the 88 million kuna recapitalisation project in the next few days. After recapitalisation, 25 percent plus one share will be transferred to the Hvar town government, Polancec said, adding that the town government would ensure 15 million kuna for the recapitalisation of the Suncani Hvar.
Hvar Mayor Pjerino Bebic said he was satisfied with the fact that the Orco Property Group would not be able to take over more than 50 percent of the Suncani Hvar's equity.
A suggestion will be made to the Orco Property Group, which holds 47 percent of the hotel company, to transfer a facility within the Suncani Hvar to the joint ownership of the Hvar town government and the Catholic Church to open a home for retired priests and other pensioners, Polancec said.
He went on to say that this would settle all property-rights disputes between the Suncani Hvar on one side and the town of Hvar and the Church on the other, which were expected to give up any further claims towards the company.
Polancec explained that the agreement with the Orco Property Group bound the government not to sell its shares in the Suncani Hvar for at least five years after the start of the public-private partnership, but that it could transfer them to another party or use them for the employee stock ownership plan. He added that under the agreement Orco had been given 500,000 shares free of charge, which it would lose if it failed to meet its contractual obligations.
Speaking about details of the allegedly controversial agreement on the establishment of the public-private partnership with Orco, Polancec said that this was not about privatisation, but about an "institutional model" of the private-public partnership, which was different from the "contractual model" referred to in the government's guidelines of last year.
The agreement envisages that in the first stage of the public-private partnership, which is still under way, Orco should recapitalise the hotel company with 200 million kuna and invest another 200 million in loans. An additional 100 million is envisaged to be invested if necessary.
The ongoing negotiations are part of preparations for the latter, additional recapitalisation in the first stage of the partnership, Polancec said.
The private party in the partnership, the Orco Property Group from Luxembourg, has so far met all of its contractual obligations - it has recapitalised the Suncani Hvar and invested most of the planned 200 million kuna. The number of employees has been increased by 242, and the average salary has been raised by more than 45 percent, Polancec said.
This has resulted in an increase in the company's value, with the government's share having increased from 123 million kuna to 497 million, Polancec said.
The settlement of property-rights disputes offers the possibility of accelerating investments in the company and its development. The parties involved in the project will go through the contract once again to see if there are any disputed issues and if parts of the contract should be amended, Polancec said.