Under the contract, Uljanik has acquired an 83.3 per cent stake in 3. Maj for the price of one kuna. As part of 3. Maj's restructuring, the state will invest HRK 847 million in the dock over the next five years, while Uljanik will invest HRK 842 million.

The Rijeka-based dock is the third and last shipyard with which negotiations were completed as part of the privatisation and restructuring of ailing state-owned shipyards.

This ends the difficult process of restructuring the shipyards, Vrdoljak said, adding that this was a unique merger of two docks and voicing confidence that it would lead to consolidation, competitiveness and profitability.

The minister said the state-owned shipyards had cost Croatian citizens HRK 28 billion since 1992, plus an additional HRK 3 billion that would be invested in them.

The current 1,800 workers in 3. Maj will be downsized to 1,400 in the first stage of restructuring, with the possibility to further downsize to 1,100, Vrdoljak said, hopeful that new employment would be possible after consolidation.

Speaking of the importance of shipbuilding for Croatia, he said this industry employed about 20,000 people, either directly or indirectly.

Regional Development and EU Funds Minister Branko Grcic said the government had managed to provide the shipyards with a new start in a relatively short time.

Uljanik CEO Rossanda said this was the beginning of a new cycle on entirely new foundations. The two shipyards will act in synergy and work at less cost, as the only way to land contracts, he added.

Vrdoljak said the new owner had the obligation to sign a social agreement in 3. Maj.