September 5 (SeeNews) - Croatia's troubled 3. Maj shipyard said on Thursday it has signed a deal to revive a shipbuilding deal with Canadian shipping company Algoma Central Corporation, which the buyer cancelled last year after 3. Maj failed to meet its contractual obligations.
The contract with Algoma for completing the construction of 733 was signed on September 4, 3. Maj said in a statement.
The shipyard did not provide further details but local media quoted economy minister Darko Horvat as saying the revived deal is worth $36 million (32.6 million euro).
"The prospects for a happy ending of this process have been developing in an optimistic way every day now and I am sure that in the next 10 days we will unblock the shipyard's account, start works on the ship of the Canadian buyer, which is the start of a process for completing all that is in the shipyard's slipway in the next two years," news wire SeeBiz quoted Horvat as saying.
Earlier this week, Horvat said that the Croatian Bank for Reconstruction and Development (HBOR) has conditionally approved a 150 million kuna ($22.4 million/20.3 million euro) loan to help 3. Maj restart production and complete vessels already under construction. The loan awaits to see 3. Maj agreeing with all creditors to postpone the repayment of their claims over unpaid debt until September 1, 2021.
In early June, local media quoted the CEO of 3 Maj Edi Kucan as saying that the key to avoiding bankruptcy is to complete the construction of the hull of a bulk carrier for Algoma Central Corporation. Hull 733 was 80% completed, news portal poslovni.hr reported at the time, and if an agreement was reached with the government to provide 120 million euro ($134.8 million/890.5 million kuna) for the completion of the remaining unfinished ships, the troubled shipyard would live to see 2020. The shipyard had four ships under construction at the time.
The government first announced its plans to support 3. Maj in early August, whereupon the commercial court in Rijeka decided to postpone to September 26 a hearing on the launch of bankruptcy proceedings against the struggling shipyard. The court has said that the government's intervention should result in unblocking the company's bank account, thus removing the main reason for the launch of bankruptcy proceedings.
3. Maj is part of troubled shipbuilding group Uljanik, which includes another major shipyard in Croatia, Uljanik Shipyard, along with smaller subsidiaries.
In May, a Croatian court launched bankruptcy proceedings against Uljanik Shipyard at the request of the country's financial agency citing the shipyard's overdue debt. Subsequently, the court also launched bankruptcy proceedings against the Uljanik Group.
(1 euro = 7.40353 kuna)