Tuesday, 21 February 2023

Can Enfeebled Brodosplit Be Rescued from Apparently Fated Bankruptcy?

February the 21st, 2023 - Can the constantly troubled Split shipyard Brodosplit be saved from its apparent destiny of bankruptcy? The company has been engulfed in turbulent times for a considerable amount of time now, as has the entire Croatian shipbuilding industry.

As Suzana Varosanec/Poslovni Dnevnik writes, for Brodogradjevna industrija Split (Brodosplit), which, through its daughter company is currently participating in the largest military technology fair in Abu Dhabi, "D-Day" is marked out on the calendar as March the 24th, 2023. This is the looming day on which the Commercial Court in Split will finally convene a decisive hearing on the matter of bankruptcy.

Along with the statement on the proposal to open bankruptcy proceedings against this debtor, the question of whether all of the proper prerequisites for bankruptcy are there will also be discussed.

On the part of Brodosplit, legal representatives Tomislav Debeljak and Tomislav Corak have been invited, meaning that the future of a company that has been struggling to keep its head above water for a while now will soon finally be clarified. As far as the blockade is concerned, in mid-February, the massive sum amounted to around 23 million euros, so as the last olive branch of salvation for Brodosplit, hopes are currently being placed in an American hedge fund that allegedly visited the shipyard several times in the past.

The fund is familiar with Brodosplit's overall capacities, claim the insiders, but the decision of the fund managers, more specifically whether they are ready to lend money to the Split shipyard or not, remains completely unknown as yet.

According to the bill of costs that is burdening the company, there is a loan worth about 100 million euros which would remove Brodosplit's blockade, pay off the debts to its creditors and finish numerous already started projects. It would also close the loan owed to a Russian creditor in the total amount of about 57 million euros. The owner has assured that the operation will take place by the said hearing, and the only other option for Brodosplit is unfortunately bankruptcy.

The aforementioned hearing was convened after the appeals court rejected Brodosplit's appeal as unfounded, while at the same time confirming the decision of the first-instance court from back in November 2022.

This is otherwise a decision that rejected the debtor's withdrawal of the proposal for opening pre-bankruptcy proceedings as untimely, while the debtor's withdrawal of the proposal for opening bankruptcy was rejected as inadmissible.

For more, make sure to check out our dedicated business section.

Friday, 19 August 2022

Enfeebled Brodosplit to Construct Expensive Vessel for Storylines

August the 19th, 2022 - The Brodosplit shipyard is continuing to face significant problems, but it seems that a saviour has come at the last moment in the form of a contract between the famous Dalmatian shipyard and the American Storylines company. Debeljak's troubled company will build the massive vessel, the estimated retail sales value of which stands at US $1.5B

As Poslovni Dnevnik/Marija Brnic writes, Brodosplit is currently suffering the fate of both the Uljanik and 3 Maj shipyards in the form of attracting negative attention with press reports about the pre-bankruptcy process of its companies. Despite the fact that Brodosplit's employees had been sent home, it seems the company will now be able to breathe a sigh of relief.

The story that Brodosplit could participate in the construction of the first so-called residential cruise ship with 547 apartments is the absolute last thing anyone could have ever possibly expected in the current uncertain situation. It seems suspicious that the Americans would sign a contract to build a ship of that size and cost. While many raise their eyebrows in disbelief, it has come to light that this fantastic piece of news is indeed true. According to the press release provided by Storylines from Miami, the contract with Brodosplit has already been signed.

Brodosplit will build a 232.5-metre-long Narrative ship in the City of Split, which, according to the press release, will be the first fully ecologically sustainable ship, and should be delivered in 2025.

"We're delighted to be partnering with such a respected European shipyard that has a long history of building high-quality passenger ships," said Storylines CEO Alister Punton. According to him, the ship will provide its residents with the comfort of home. It differs from other cruisers in that it is intended for the complete life of residents at sea. It will also boast a post office, a school, a library, a hospital, a bank, swimming pools, business premises and about 20 different catering facilities. It will also be the largest wellness centre at sea in the world with its own gardens, farms and space for several types of sports and recreation on board.

For more than understandable reasons, Brodosplit has been very brief in its communication about the construction of the ship. Everything, they say, was said in the Storylines press release, which also includes Tomislav Debeljak's statement.

"We always enter into projects that bring about the development of the industry and the inclusion of new technologies. This ship is energy efficient, with two types of propulsion (diesel and liquefied gas) and will be optimised for the lowest possible emission of greenhouse gases," Debeljak said in his statement.

Their American partner, therefore, still believes that Brodosplit is a good choice for a partnership, and the second question to now keep in mind is how the Croatian Government will behave, given that Brodosplit needs an advance guarantee to get things moving.

For more, make sure to check out Made in Croatia.

Monday, 30 November 2020

Brodosplit's Tomislav Debeljak Expects Conclusion of More Vessel Contracts

November the 30th, 2020 - Tomislav Debeljak, the owner and president of the well known Croatian shipyard Brodosplit, has spoken about the effect the ongoing coronavirus pandemic has had on his business, and his expectations that more contracts for the construction of vessels, some of which will be global sensations, will continue to be concluded.

As Poslovni Dnevnik writes, Tomidlav Debeljak has stated that in the forthcoming period, Brodosplit will complete the previously contracted polar cruisers, and they're busy constructing four coastal patrol boats that they contracted last year after the OOB-31 ''Omis'' prototype successfully passed all of its testing.

''We'd like to thank the Croatian Government because, despite the pandemic, it found ways to finance the continuation of the construction of these vessels and they'll be completed on time as a result of that. We also expect to conclude several more contracts for the construction of ships, some of which will be international sensations. After the announcement of the vaccine against SARS-CoV-2, the market came back to life and every day we have more and more inquiries, as well as updates on negotiations that were stalled due to the pandemic,'' Debeljak added.

''Since the beginning of the pandemic, we've done everything in our power to preserve the health of Brodosplit's employees and maintain the production process. Although it's constantly hanging over our heads, closing the shipyard isn't an option and we're actively doing everything to avoid that. That's why we underook virus protection actions even before anything like that was officially organised in our area.

The entire DIV group is operating positively and has more than 1.8 billion kuna in capital and reserves, making it the group of the largest employers in Croatia, as well as being among the largest exporters. In the first three quarters of 2020, at the group level, we realized 540 million kuna in exports.

Profitable shipbuilding, which we deal with, shows its results in revenues, ie the value of an individual ship and the percentage of the Croatian component that is built into it. In our case, it's at least 70 percent, in which the largest part is Croatian intelligence (design), Croatian knowledge and ability (construction), Croatian subcontractors and suppliers, energy, and also the amount of financing costs that remain within Croatia,'' Tomislav Debeljak explained.

''So far and for the most part, these export operations have been monitored by HBOR, with whose help we've managed to position ourselves as an unmissable player out on the global market in the segment of medium-sized polar cruisers, which has suffered much less during this crisis than the shipyards which deal with mega cruisers have. Arrangements are already being made for polar cruisers, they'll be the first to set off in the spring with travel, and this immediately aroused greater interest from customers, so we expect to continue filling Brodosplit's order book.

We also have our own fleet of boats, so, with the Katina luxury yacht, we've still managed to successfully achieve 126 days of charter throughout the past 12 months, regardless of the coronavirus crisis.

We're building a technologically advanced ship for polar expeditions called ''Ultramarine'', contracted with Quark Expeditions from the USA, it's the most expensive polar cruiser contracted in Croatia so far, and a job worth more than 100 million euros. We're also participating in offshore construction projects. We've come to an agreement with the Greek AVAX-on the construction of a steel structure for the Ston Bridge and the Prapratno Viaduct. This strengthens our position as a European shipyard which is fully capable of building extremely demanding steel structures,'' Tomislav Debeljak stated.

More than 2400 employees work for Brodosplit each and every day. The company has many young, ambitious people who have enormous amounts of energy and a true and deep love for shipbuilding and Brodosplit has stated how it as a company enjoys working with them.

''We're proud of our successes and we're looking forward to the future with optimism,'' concluded Tomislav Debeljak, Brodosplit's owner.

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Tuesday, 7 July 2020

Tomislav Debeljak Opens Bankruptcy of Norwegian Shipyard

As Poslovni Dnevnik/Marija Brnic writes on the 6th of July, 2020, DIV's Croatian owner Tomislav Debeljak filed an official petition on Friday in Norway to open bankruptcy proceedings over his shipyard, Kleven Verft, and its two subsidiaries, of which he became the owner earlier this year.

As it could be read from the Norwegian media, such an outcome came to be after a group of banks terminated a loan agreement for Kleven for one construction and blocked its associated accounts.

Last week, Tomislav Debeljak tried to negotiate with the banks, assuming that their actions were unfounded, but the negotiations didn't result in an agreement and a return to the starting positions, so Debeljak requested the initiation of bankruptcy proceedings.

The loan cancelled by the banks related to the financing of the construction that Kleven, allegedly under pressure from the "locals", took over from another Norwegian shipyard which was about to go bankrupt, but from the statements from DIV it can be concluded that this was only a reason which was listed formally.

The banks went for the termination of the contract after the appointment of the new Management Board back on June the 22nd, more precisely when the dismissal of the top managers and the arrival of Tomislav Debeljak himself as the CEO took place.

He told the local Norwegian media that DIV, in addition to the fact that the clients were affected by the coronavirus pandemic and as such needed to alter their plans, also faced a number of other difficulties due to which the initial business plan for Kleven was drastically changed.

"Shortly after the formal takeover of Kleven, it became clear that not everyone shared our goal of making Kleven a strong and stable shipyard," Tomislav Debeljak said in a statement.

DIV has been reluctant to provide the details, and they only briefly noted they will work to protect their interests and investment, and that they have already launched their own investigation to establish all the facts which led to the move. It has been unofficially circulating that the former managers were fired due to suspicions of concluding harmful contracts for Kleven.

"Based on the results of the investigation, we'll decide on the following activities in cooperation with the institutions of the Kingdom of Norway and the Republic of Croatia," a statement from DIV said.

The shipyard in Ulstein was taken over by DIV after being named the most promising bidder by several Norwegian shipping companies. The details and value of the takeover of Kleven, which was already on the verge of bankruptcy, aren't currently known, so it's difficult to assess the damage that DIV has suffered with this failed acquisition, from which good results were expected in Croatia and Norway through the synergy of the two shipyards.

The first project to be done jointly was presented just a month ago, and it regards the construction of the luxury residential yacht M/Y Njord, which is 281.8 metres long and 33.5 metres wide, boasting 12 platforms and 118 apartments ranging from 116 to 800 square metres in size.

Its construction was contracted for Ocean Residences Development from Malta, and the first phase, the hull construction and its installation should begin this year in Brodosplit, while equipping the vessel at Kleven should be completed in 2024.

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Tuesday, 21 January 2020

Croatia's Tomislav Debeljak Takes Over Shipyard in Norway

Tomislav Debeljak of DIV group has his eye on a struggling shipyard in Norway, and the two parties have come to an arrangement that is sure to suit both.

As Poslovni Dnevnik/Marija Brnic writes on the 20th of January, 2020, in the announcement, the two companies state that the acquisition contract should be finalised in the next few weeks, and they expect good synergies in both financial and production terms.

A DIV group owned by Brodosplit has entered into an agreement to take over the Norwegian shipyard Kleven Verft. It is a shipyard that has been experiencing numerous difficulties in recent years and was taken over by the Norwegian shipping company Hurtingen to complete the construction of the previously ordered ships.

As previously stated, in the joint announcement, both companies have stated that the acquisition contract should be finalised in the next few weeks, and that they expect good synergies in both financial and production terms.

''We are very pleased to have signed this agreement, which provides an opportunity to connect the two shipyards with a long tradition. Kleven is recognised throughout the world as a Norwegian shipyard with top references, especially when it comes to the fitting out of complex ships,'' says DIV owner Tomislav Debeljak.

''I am incredibly happy on behalf of all of Kleven's employees to have a new and solid shipyard owner. We went through a difficult period and were able to deliver some fantastic ships while maintaining a high level of expertise in our shipyard. Together with the new owner, we have long-term plans. This will be a new and exciting period for all of Kleven's employees,'' stated CEO Kjetil Bollestad.

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Friday, 9 August 2019

Tomislav Debeljak ''Importing'' 200 Indian Workers to Croatia's Brodosplit

The demographic crisis in Croatia is continuing to bite, and while chronic staff shortages remain the main plague of Croatian employers, many companies across the country are now turning to the ''import'' of third country nationals, such as Indians.

We have written quite extensively on the Croatian demographic crisis, the staff shortages and the repeated increase in the quota for foreign (non EU) labour by the Croatian Government. While this has mitigated problems to a degree this year, it isn't clear what the strategy will need to be next year. After all, it isn't just tourism workers that Croatia is lacking during the season, it is qualified labour from all sectors who are making their way abroad.

The Croatian love of red tape and paperwork is also throwing a spanner in the works despite the government's quota increase for foreign workers, as many Croatian employers who give jobs to those from outside the EU, even from as close by as neighbouring Bosnia and Herzegovina and Serbia, are waiting for an average of two months for their residence and work permits to be approved, and by that time - they're no longer required. Without the necessary papers given the green light by MUP, these third country nationals cannot be paid a wage.

You can read more on this secondary plight on Croatia's employers here.

As previously mentioned, it isn't just tourism workers who are desperately needed in Croatia, but skilled staff from all fields. Tomislav Debeljak of the shipbuilding giant Brodosplit, has found a way to make ends meet as far as staffing is concerned.

As Poslovni Dnevnik writes on the 8th of August, 2019, more than 2000 workers are currently employed at Brodosplit. The first group of workers from India will start working in Brodosplit in early September, Slobodna Dalmacija has learned. It is estimated that there will be about two hundred Indian workers at Brodosplit by the end of this year.

According to the currently available information, Brodosplit's Indian employees will have a monthly salary of around 950 euros.

Otherwise, workers in Brodosplit can earn up to 1,500 euros net per month, while subcontractors, which is the status the company's Indian workers will have, are paid around 12 to 16 euros per hour.

As stated, Brodosplit currently employs more than 2000 workers, and many of them are workers from all over the world working in cooperative companies, depending on the current needs for certain professions, so that the contracted jobs will be completed as well as possible. The addition of 200 Indian workers will surely make things easier on the company.

Make sure to follow our dedicated business page for much more.

Thursday, 2 May 2019

Chinese Interested in Croatian Shipyards, With One Condition...

The Chinese interest in Croatian projects is continually growing, or so it seems, and there is now room to dare when it comes to the potential Chinese rescue of Uljanik and 3 Maj at the eleventh hour.

As Marija Brnic/Poslovni Dnevnik writes on the 2nd of May, 2019, the Chinese CSIC representatives currently visiting Croatia to see the state of Croatia's ailing Uljanik (Pula) and 3 Maj (Rijeka) shipyards have expressed clear interested in new projects with Croatia's shipyards, but only if the Croatian state covers the cost of what has already failed, there have also been mentions of the diversification of production, but they don't want guarantees.

If there is an agreement between the Croatian Government and the Chinese CSIC about reviving Uljanik and 3 Maj, it will be done so with regard to a combination of the models which were discussed with the previous two strategic partners, Darko Končar and Tomislav Debeljak.

According to the explanation given by Minister of Economy Darko Horvat after the final talks and the three-day visit of CSIC's representatives, the Chinese are indeed interested in starting with new projects, while the state should cover the cost of old, failed projects, meaning it will need to take place on a clean slate. It's also more than likely that the sites of today's Croatian shipyards will see other projects developed there, that is to say, the diversification of activities will occur.

"If they don't see the possibility of continuity of shipbuilding at this time, we want other industries to take place here, and not just those exclusively involved in shipbuilding," Minister Horvat stated. Therefore, unlike Danko Končar's initial idea, Chinese diversification would not be a real-estate business, but would involve some sort of other, new production aside from shipbuilding. And the clean starting position the Chinese have indicated that they want, which is similar to what Tomislav Debeljak sought but is unlike his idea, almost certainly means declaring the bankruptcy of the two shipyards.

"We don't expect them to finance failed attempts to build ships that haven't been completed. The starting position means new projects,'' stated Horvat in reference to the wishes of the Chinese.

The continuation of construction in Pula and Rijeka in partnership with CSIC would in any case have a completely different financing philosophy. The Chinese say, after the talks, that they are completely astonished at the reliance of state guarantees for shipbuilding. To repeat what Finance Minister Zdravko Marić stated recently, it's much too early to talk about exactly what changes might occur in this context following their entry into Uljanik and 3 Maj. Over the next few weeks, CSIC's senior people will analyse the collected information and determine whether or not, and indeed in what form they're interested in entering into the structures of Croatia's enfeebled shipyards.

At this moment in time, Darko Horvat has merely announced that any form of Chinese entry would involve a new way of financing, with different sources, a different way of drafting project documentation, and would involve no state guarantees. After the final talks at Zagreb Airport, Horvat didn't provide any more specific information, nor the deadlines within which he expected to receive feedback from the Chinese, but he did appear to try to leave the impression that he was optimistic about the whole situation. The Chinese representatives themselves, however, didn't give any media statements.

Make sure to follow our dedicated business page for more information on Chinese-Croatian business relations, Chinese projects and investments in Croatia, doing business, working and investing in Croatia and much more.


Click here for the original article by Marija Brnic for Poslovni Dnevnik