Wednesday, 29 September 2021

Zagreb Stock Exchange: Podravka Again Most Traded Stock

ZAGREB, 29 Sept, 2021 - The Zagreb Stock Exchange (ZSE) Crobex index on Wednesday decreased by 0.21% to 1,983 points, while the Crobex10 increased by 0.03% to 1,126 points.

Regular turnover was HRK 13.3 million.

Again, the most traded stock was the Podravka food company, which turned over more than HRK 4 million, closing at a record-high HRK 636 per share, up 1.3%.

Podravka has been recording an increase in turnover for three weeks, during which time its shares have mainly been bought by the Pivac meat industry, which holds 3.18% of Podravka's equity.

Forty-four stocks traded today, with 12 increasing in price and 20 decreasing, while 12 were stable.

(€1 = HRK 7.489688)

For more about business in Croatia, follow TCN's dedicated page.

Wednesday, 29 September 2021

Expectations For Croatia's Economy Close to Pre-Pandemic Level

ZAGREB, 29 Sept, 2021 - Expectations for Croatia's economy in September 2021 came close to the pre-pandemic level, supported by confidence in services and retail trade, while consumer confidence was down, a European Commission report said on Wednesday.

In September 2021, the Economic Sentiment Indicator (ESI) in Croatia went up 0.7 points on the month to 112.7, its highest level since February 2020, just before the pandemic broke out, when it was  at 113 points.

Services and retail trade confidence saw the highest increases, by 3.3 and 3 points, respectively, while industry confidence increased by 0.4 points.

Construction confidence decreased by 0.8 points and consumer confidence by 1.6.

Business leaders said they planned to intensify hiring in the coming period, resulting in a 0.9 point increase of the Employment Expectations Indicator (EEI) to 111.5, a record high since 2019.

Optimistic European consumers

In September 2021, the ESI remained unchanged in the EU (at 116.6) and broadly stable in the euro area (+0.2 points to 117.8).

Construction confidence went up by 1.8 points in the EU and by 2 points in the euro area, while consumer confidence went up by 1.1 points in the EU and by 1.3 in the euro area.

Industry confidence remained unchanged in the EU and marginally improved in the euro area.

Retail trade confidence decreased by 2.8 points in the EU and by 3.3 in the euro area, while services confidence decreased by 1.4 points in the EU and by 1.7 in the euro area.

The EEI increased further (+1.0 point to 113.6 in the EU and +0.8 points to 113.6 in the euro area).

For more about business in Croatia, follow TCN's dedicated page.

Tuesday, 28 September 2021

Zagreb Stock Exchange Main Indices Up For Second Straight Day

ZAGREB, 28 Sept, 2021 - The main Zagreb Stock Exchange (ZSE) indices went up on Tuesday, the Crobex by 0.43% to 1,987 points and the Crobex10 by 0.47% to 1,216 points, while regular turnover was HRK 11.5 million.

The most traded stock was the Podravka food company, turning over HRK 2.55 million. It closed at HRK 628 per share, up 1.95%.

Forty-one stocks traded today, with 19 going up in price and ten going down, while 12 were stable.

(€1 = HRK 7.491414)

For more about business in Croatia, follow TCN's dedicated page.

Thursday, 23 September 2021

How Croatian Businessman Allegedly Kicked Turkey Out of €150m Project

September the 23rd, 2021 - A scandal involving a Croatian businessman and Turkey has caused international scandal and seen powerful politicians from both countries apparently discuss it.

As RTL/Silvana Mendjusic writes, the construction of the first geothermal power plant in Ciglena near Bjelovar in a project worth more than 300 million kuna, and it was started together, and the Turkish investor, the majority owner, cut the ribbon in the company of Minister Tomislav Coric. Production at Geoen began, and huge sums of money and generous support began to flow into an account.

Over a period of twelve years, they were supposed to earn more than a billion, and then it all got complicated. The minority owner, Croatian businessman and entrepreneur Dragan Jurilj, allegedly set out to get the Turks kicked out of the story and has so far succeeded. While he claims that everything is being carried out according to the law, the Turks claim that their investment was stolen from them. They're threatening arbitration, warning that in the end everything will be paid for by Croatian citizens, and they have even called on Erdogan for help.

On the sidelines of the summit in Antalya, Croatian Prime Minister Andrej Plenkovic and Turkish President Erdogan talked about illegal migration, Bosnia and Herzegovina, economic cooperation, but also one concrete and currently very ''hot'' case involving this Croatian businessman.

"We've been informed that our President Erdogan mentioned the case to the Croatian Prime Minister," said lawyer Ozlem Canbeldek Akin.

According to the legal representative of the Turkish company BLT, who claims that their Croatian partner stole a project worth more than a billion kuna from, the stakes are high, and they're equally nervous on both sides.

"How they did not have a fair trial!? All of these processes are legitimate and every investor in the Republic of Croatia is obliged to respect final court decisions, whether they're satisfied with the outcome or not. I'm not satisfied with all these verdicts," said Dragan Jurilj.

The dispute, which has now risen to quite a high political level, is one taking place much lower down, a few thousand metres below the surface in fact, deep in the geothermal treasures of Croatia in which these former partners are arguing over the ownership of the Velika geothermal power plant near Bjelovar. The Turks claim: "We've invested about 300 million kuna in this, that's roughly 55 to 60 million euros. We have invested a lot, and now we've been left with nothing."

At the beginning of this saga, which is all to do with the ownership ratio within Geoen - the project holder was 80 percent for the Turkish company, and 20 percent for the Croatian businessman and their partner, Dragan Jurilj.

"I gave the company 157 million in appraised assets - four wells, permits, a power purchase agreement, concessions... I didn't indebt the company, I gave the company 157 million. They were supposed to give 300 million to give and not borrow based on my assets. They they just took out loans and indebted the company,'' said Jurilj.

''Why didn't you take out a loan yourself?'' Jurilj is asked.

- Well, OK.

''You had no references at the time...''

- That's right. I didn’t have any references at the time, but for references you get a commission or some smaller percentage, you don’t get 80 percent.

''Okay, did you agree to it?''

- I didn't agree to anything. They were supposed to convert that loan after the completion of the project, they were one hundred percent indebted to the company, and they were supposed to convert it into capital reserves. They didn't do that.

Two years ago, the geothermal power plant was inaugurated. According to the agreement, the financing is on the side of BLT. And we've met those requirements. BLT has provided the capital and a loan," he said.

Along with Muharem Balat, the owner of the Turkish company, Minister Coric openly praised the project. He will now be asked to rule on the administrative proceedings.

"Our investment was stolen from our shareholders, we want compensation from those shareholders. But if we fail in that, then we'll have to go to the European Court of Human Rights and we'll seek arbitration and compensation which will then end up being the burden of Croatian taxpayers which we wouldn't have wanted… "

The foundation of any such move, he says, will be the thesis that they didn't have the right to a fair trial in Croatia.

"There's no arbitration, so Croatia can't be responsible for inter-member relations, the Republic of Croatia can only be responsible if it harms the project, if the project stops functioning for any reason ...", said Dragan Jurilj.

When operating, the geothermal power plant produces electricity for about 29,000 households in total. The power plant is a privileged producer of energy, as it produces electricity from renewable sources, it is then sold on at a discounted price. This directly regards about one billion and 200 million kuna of revenue annually, if not more.

Last year’s amount alone is enough to understand why these ex-partners are fighting so hard for ownership, as back in 2020, they produced 76.2 gigawatt hours of electricity and 120 million kuna without VAT was paid. The market value of energy was 21 million kuna and the amount of aid paid out was 99 million kuna. This generous relationship between the market and the preferential price is the greatest thing this plant can boast of.

It all started last year, say the more than disgruntled Turkish partners. Jurilj then sent an envelope to Turkey marked as an invitation to the Assembly of the Society. But it wasn't an invitation to the Assembly, but some unimportant documentation. Invitations to the assembly don't need to be notarised. If you register an envelope in the post office as an invitation to the Assembly - it is classed as an invitation. So, he registered it and at the session of the Assembly in our absence he changed the management. According to our agreement, our members must be on the board. They kicked us out of that session.

How the deception of the Turks began, according to them...

"I sent an invitation to the Assembly based on the Companies Act, I haven't engaged in anything illegal. I've invited them to the Assembly several times. If they don't respond the first and the second time, I have the right to legitimately make decisions," Jurilj added.

That's illegitimate, claimed the Turks. They then filed a complaint and the measure was temporarily suspended in the Commercial Court. Jurilj was then asked not to send the invitation to Turkey but instead to their Zagreb branch. Unfortunately, another invitation to Turkey was sent, this time it really was an invitation for the Assembly, but when the Turks received it, because it takes some time for the shipment to reach Turkey, they claim that the Assembly had already been held.

"I did everything according to the law, if something was late, then that's not my fault, and they ignored my invitation to the Assembly for a couple of years," claims Jurilj.

They say they asked you to send it to the office in Zagreb.

"It's not written in the law, it says it's sent to the address of the centre. I sent them that invitation."

Doesn’t it feel like you wanted them not to come?

"I did everything according to the law."

Jurilj and his new partner Goran Pavlovic convened a new assembly, they called upon Turkish board members, and then Jurilj demanded that the Commercial Court in Zagreb, due to non-fulfillment of the partnership agreement, register the deletion of the Turkish company BLT from the project.

"Unfortunately, at the Assembly held without our presence, they made a decision that BLT must pay additional performance to Geoen," the lawyer added.

BLT reacted by submitting to the Commercial Court the measure according to which the exclusion of BLT could not be carried out. Unfortunately, at the Assembly held without our presence, they made a decision that BLT must pay additional payments to Geoen.

The Turks claim that in one year, Dragan Jurilj withdrew more than 80 million kuna...

The Turks have had the most objections to the court register. The response we received from the Commercial Court was: "Oh, we checked the court register and you aren't co-owners, plus there is no more Geoen and we have to suspend the proceedings."

They are directly accusing Jurilj of ''extracting'' more than 80 million kuna from the company since the summer of 2020.

"That isn't true, and secondly, BLT has expressed disloyal behavior, disrespect and made threats of lawsuits against banks, and threats to institutions that have succumbed to its influence ...", the Croatian businessman said, and the Turkish investors are now filing criminal charges for fictitious debentures.

"They managed to extract eight million euros paid by HROTE (Croatian energy market operator)," the lawyer added.

"At the same time, the bank isn't allowing me to dissolve the company's account, although I'm the director, the authorised person and the sole owner.'' said Jurilj.

What has HROTE got to do with it all?

What's going on now? The power plant is still working. In the first eight months, the power plant produced electricity worth 25 million on the market. There have been incentives worth 49 million. But those 75 million HROTE - the market operator with which the energy purchase agreement was signed - are no longer being given to anyone.

HROTE proposed to the court the establishment of a court deposit in which they would pay the funds. The court refused to establish a deposit, HROTE appealed and the appeal proceedings are ongoing. Dragan Jurilj, on the other hand, accuses HROTE of paying 25 million kuna to Geoen into a foreign account.

"I went to the bank on behalf of Geoen, and the order wasn't accepted. They came to HROTE to transfer my money abroad, HROTE isn't even the director of the company, it was reported to the institutions which deal with this, and that Turkish bank has been as well,'' said Jurilj.

HROTE replied that their actions were supported by appropriate court decisions and that Jurilj's allegation was unfounded.

If HROTE doesn't pay you, do you not have a contract stating how you'll perform your obligations to the workers?

“According to the workers we're dealing with, we have issues with the difficulty of paying the tax debt according to the budget because it is a debt from 2020 while BLT ran the project and while they were taking money from the project,” claims Dragan Jurilj.

DORH (State's Attorney Office of the Republic of Croatia) has been informed of the situation

We informed the DORH in a timely manner about the legal situation regarding Geoen, as well as about our actions. Given the many ongoing court proceedings, we don't wish to go further into commenting on the statements made by the opposing parties.

"They're ignoring the opinions of the law. They haven't yet transferred the energy purchase agreement and are putting the entire plant into question, and then it will only continue to harm BLT and me as a creditor member, and the state budget."

The chronology of court decisions shows that the Commercial Court in Zagreb and the court register acted faster in favour of Croatian businessman Dragan Jurilj, and slowly when decisions had to be made, they leaned more in favour of BLT.

"We were first deleted from the court register, we lost our stakes, and while we were fighting for those stakes, Geoen was attached to GS, and the economic entity was transferred to another Eco Consult entity."

They pointed out that they haven't so far been allowed to prove their claims in court.

"We have nothing to lose, I'm being honest, I know these are serious accusations being made against the judges. I wouldn't want to go that far, but when I look at the case, there are things I can't understand, some things can't be legally explained." the Turks claim.

"BLT constantly keeps going to all these institutions and claiming to have been damaged, that they're going sue the state, but they can't sue the state. They do have the right to demand compensation for those shares and they'll have them paid. Nobody is trying to run away from that fact," assured Jurilj.

In this dispute, both parties filed several criminal charges, the State Attorney's Office was informed in the meantime. Jurilj, on the other hand, is exploring a new geothermal field - Slatina dva, which is twice as strong as the power plant near Bjelovar, and there is a much bigger investment to be had in Slatina.

The Ministry of Economy failed to respond to our request. Although the representatives of the Turkish side claim: None of Jurilj's companies still has a legal basis for the exploitation of geothermal waters. They explained that the rights from the license can be transferred to another economic entity only if the Government, at the proposal of the Ministry, gives explicit prior written consent. However, Minister Tomislav Coric is not making any sort of move as far as this is concerned - yet.

For more, follow our business section.

Wednesday, 22 September 2021

Zagreb Stock Exchange Indices Rise For Second Day in Row

ZAGREB, 22 Sept, 2021 - The main Zagreb Stock Exchange (ZSE) indices rose for the second consecutive day on Wednesday, the Crobex by 0.61% to 1,957 points, and the Crobex10 by 0.5% to 1,197 points, after dropping by more than 1% on Monday to their lowest levels since the end of July.

With regard to sectoral indices, the industrial index increased the most, by 3.07%, and only the food index saw a decline, of 0.11%.

Regular turnover was HRK 6.44 million, or about HRK 17 million less than on Monday.

The only stock to cross the million kuna turnover mark was Ericsson Nikola Tesla with a turnover of HRK 1.19 million. Its price went up by 1.19% to HRK 1,700 per share.

A total of 37 stocks traded today, with 19 of them registering price increases, 7 recording price decreases and 11 remaining stable in price.

(€1 = HRK 7.495943)

For more about business in Croatia, follow TCN's dedicated page.

Wednesday, 22 September 2021

Maraska Drink Factory Marks 200th Anniversary

ZAGREB, 22 Sept, 2021 - Prime Minister Andrej Plenković on Tuesday visited Zadar's most famous company, the Maraska beverage producer, accompanied by its new owner, Bosnian entrepreneur Svjetlan Stanić.

The hosts informed the prime minister about the alcoholic beverage plant, where the extract of marasca cherry and walnut is stored in big barrels. Besides the Maraschino liqueur, Maraska is proud of the fact that it is one of the few companies producing the Orahovac liqueur in the old way, from green walnuts. 

"I'm pleased to see that a centuries-long tradition has been preserved and that production will continue in future. I'm confident that with the production of key brands, these traditional products will find their place on the domestic and foreign markets," Plenković said.

He congratulated the Stanić Group, which recently bought Maraska, on the 20th anniversary of the alcoholic and soft drink factory. "It's an excellent move for branding Zadar and Croatia, for contributing to investment from Bosnia and Herzegovina in Croatia and from Croatia in Bosnia and Herzegovina and, it seems, it's a great signal for new investment which will advance production."

"On behalf of the government, I welcome this investment in Zadar, which has had a great tourism season, which is quickly recovering after the COVID crisis," Plenković said.

Stanić Beverages, a company owned by the Stanić Group, signed a contract on the purchase of Maraska with Saponia and Koestlin, members of the Mepas Group. Stanić Beverages now owns 98.25% of Maraska shares, having bought 45.3% from Koestlin and 52.90% from Saponia. It will also make a binding public offering for the rest of the stock after the completion of the transaction with Saponia and Koestlin.

For more about business in Croatia, follow TCN's dedicated page.

Tuesday, 21 September 2021

Zagreb Stock Exchange Indices Rebound

ZAGREB, 21 Sept, 2021 - The main Zagreb Stock Exchange (ZSE) indices rebounded on Tuesday, with the Crobex increasing by 0.31% to 1,945 points and the Crobex10 by 0.11% to 1,191 points.

Turnover at the close of the trading session was HRK 23.6 million, about 5.1 million higher than on Monday.

The highest turnover, of HRK 18.3 million, was generated by the Podravka food company, the most liquid stock in the last four days. Its price remained stable at HRK 600 per share.

No other stock passed the turnover mark of one million kuna.

A total of 36 stocks traded today, with 17 of them registering price increases, 8 recording price decreases and 11 remaining stable in price.

(€1 = HRK 7.500499)

For more about business in Croatia, follow TCN's dedicated page.

Tuesday, 21 September 2021

Span IT Company Raises HRK 101.2 Mn Through Public Offering, Shares Listed on Zagreb Stock Exchange

ZAGREB, 21 Sept, 2021 - The Croatian IT company - Span has sold 578,200 shares at a price of HRK 175 per share though a public offering , raising close to HRK 101.2 million, it was said in Zagreb on Tuesday, when the Zagreb Stock Exchange (ZSE) and Span signed an agreement on the listing of Span's shares on the ZSE Official Market.

Span's shares were bought by more than 1,000 shareholders, and trading in them will start on 23 September.

Marked SPAN-R-A, all of the company's 1,960,000 shares were listed on the Official Market. Span is the first domestic IT company after Ericsson Nikola Tesla to have its shares listed on the ZSE.

Span CEO Nikola Dujmović said interest in the company's shares, both from qualified and small investors as well as Span employees, had been very high, with demand by far exceeding the offer. Bids could be submitted from 6 to 10 September.

Span had offered 578,200 shares or 29.5% of its stock capital, with the price ranging from HRK 160 to 175. Following registration, Span decided that the final price should be set at HRK 175 per share.

Qualified investors have acquired 55.9% of the 578,200 shares, followed by small investors, who acquired 35.6% of the offered shares.

Span employees bought 49,000 shares or 8.5%. They could each buy a maximum of 1,500 shares and small investors could buy a maximum of 19,600 shares. There was no limit for qualified investors, who bought the most shares.

For more about business in Croatia, follow TCN's dedicated page.

Tuesday, 21 September 2021

Volume of Construction Work Grows For 14th Straight Month Y-O-Y

ZAGREB, 21 Sept, 2021 - The volume of construction work in July 2021 was 6.5% higher than in July 2020, however it fell by 4.9% compared to June 2021, the State Bureau of Statistics (DZS) reported on Tuesday.

July was the 14th month in a row for the volume of construction work to increase on the year.

DZS data indicate that the volume of construction work done on buildings in July was 5.3% higher y-o-y whereas the volume of other structures increased by 8.1%.

Compared to June the volume of construction work contracted by 6.2% on buildings and by 3% on other structures.

In July, 61% of working hours on construction sites were conducted on new structures while 39% were for reconstruction, repairs and maintenance.

For more about business in Croatia, follow TCN's dedicated page.

Wednesday, 15 September 2021

INA Considering HRK 2 bn Bond Issue

ZAGREB, 15 Sept, 2021 - The INA oil company said on Wednesday it was considering issuing bonds on the domestic capital market in the nominal amount of HRK 2 billion maximum, with one-off principal maturity after five years maximum.

The Board today decided to issue the bonds and list them on the Zagreb Stock Exchange.

The issuing and the listing will be done provided that all regulatory permits are obtained in line with regulations and subject to acceptable market conditions.

INA hired Erste & Steiermärkische Bank, Privredna Banka Zagreb and Raiffeisenbank Austria as the issue agent.

For more about business in Croatia, follow TCN's dedicated page.

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