Petrokemija’s Moment of Truth Approaching

By 19 February 2018

ZAGREB, February 19, 2018 - The process of recapitalisation of fertiliser maker Petrokemija is not finished, but it has not been terminated nor did it fail, State Assets Minister Goran Marić said on Monday, expressing confidence that the process would succeed and the recapitalisation model would be known in the coming weeks.

Addressing a press conference, Marić said he did not know whether there would be a strike at Petrokemija, adding that the government would closely follow developments in the company. "The government will do all it can to save production in Petrokemija. When such a large and valuable business entity is at issue, a solution should always be sought," he said.

He did not say whether the government would write off the company's debt, which is allegedly investors' condition for recapitalisation, but reiterated that a solution should be found and that he thought the government would find it.

"If the recapitalisation process is designed as a short-term solution, then it's not worth it. This process must solve the problem of Petrokemija in the long term and establish such a business system that will be stable for the workers, for the production, for the suppliers and creditors, for all, and I think that is feasible," Marić said.

The Kutina-based company found itself in trouble in mid-January after INA suspended its natural gas supplies because it could not collect payments for the previous deliveries. Although INA later resumed gas deliveries, recapitalisation remains crucial for the normal functioning of Petrokemija.

Petrokemija's shareholders decided at an emergency meeting last month to launch the recapitalisation process in a bid to raise 450 million kuna. This would be done by issuing 45 million ordinary shares at a nominal value of 10 kuna.

Petrokemija has said earlier it received binding offers from several bidders. According to media reports, among them are Austria's Borealis and the Croatian companies PPD and INA.

Disappointed by the slow process of recapitalisation, two trade unions and the association of war veterans working at Petrokemija sent an open letter to Prime Minister Andrej Plenković on February 14 giving him seven days to make a strategic decision on the continuation of recapitalisation or he would lose their support.