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ZAGREB (Croatia), May 17 (SeeNews) - A Croatian court has decided to launch bankruptcy proceedings against Uljanik Group [ZSE:ULJN], the shipbuilding group said on Friday, several days after the court opened such proceedings against its key member Uljanik Shipyard.
The group announced the decision of the commercial court in Pazin in a statement submitted to the Zagreb Stock Exchange (ZSE). Following the announcement, the ZSE suspended trading in Uljanik's shares.
Earlier this week, the Pazin court launched bankruptcy proceedings against the troubled Uljanik Shipyard. The group comprises another one of Croatia's largest shipyards - 3 Maj, along with smaller subsidiaries.
In March, Croatia's financial agency FINA sought Uljanik Shipyard's bankruptcy over an outstanding debt of 28.2 million kuna ($4.2 million/3.8 million euro).
Last month, the commercial court in Rijeka rescheduled for June 5 the hearing at which it was to decide whether to open bankruptcy proceedings against the 3 Maj shipyard.
The Uljanik Group has been in financial trouble for some time due to the adverse effects of the global financial crisis on the shipbuilding sector with the government declining to endorse a proposed restructuring of the two shipyards, considering the risk for the country's economy as too big.
In March, prime minister Andrej Plenkovic said the government had spent 31.7 billion kuna between 1992 and 2017 for the recovery of Croatian shipyards, with 4.3 billion kuna of the total going to Uljanik and 9 billion kuna to 3 Maj, or an overall 13.3 billion kuna for what is today Uljanik Group.
Following the announcement of the launch of bankruptcy proceedings against the Uljanik shipyard, Plenkovic said that representatives of China Shipbuilding Industry Corporation (CSIC) are expected to shortly visit again Croatia's troubled shipyards, adding that the bankruptcy does not mean an end for the company.
In late April, a delegation of the Chinese shipbuilding company arrived in Croatia for talks about a potential investment in Uljanik Group. Earlier that month, the Croatian government said that representatives of CSIC would visit the Uljanik and 3 Maj shipyards between April 25 and May 10.
(1 euro = 7.42565 kuna)