The state will transfer free of charge to SN Holding 54.83 percent of shares in the Opatija-based hotel chain Liburnia Riviera Hoteli (LRH) in an effort to settle all ongoing disputes between SN Holding and the Croatian Privatisation Fund (HFP), and the HFP will pay SN Holding HRK 162.1 million which that company had paid under a 2005 agreement that was never carried out, the Croatian government said at a session on Friday at which it adopted a decision to exempt from sale and transfer LRH shares to SN Holding.
"This is yet another tough decision this government has to make, it refers to a period of time long before the term of this government, but it could cause extremely high financial costs and problems for this or some future government, so we are suggesting accepting the settlement," said Agriculture Minister Petar Cobankovic who chairs the HFP's Steering Board.
The government decided to exempt from sale 165,941 shares of LRH that are in the HFP's portfolio and authorised the HFP to transfer those shares free of charge to SN Holding with the aim of settling all ongoing disputes between SN Holding and the HFP before courts and administrative and other state bodies, entrusting the HFP president to sign an agreement on the settlement of disputes with SN Holding.
The decision was made in order to avert greater damage for Croatia, which in case of higher claims by SN Holding would amount to more than HRK 1.8 billion, said Cobankovic.
The agreement to be signed by the HFP and SN Holding envisages the transfer by the HFP of 165,941 LRH shares to SN Holding.
The HFP will also pay SN Holding HRK 162.1 million in three installments because SN Holding transferred that amount of money to the HFP under an agreement signed in 2005. As the agreement was never carried out, SN Holding claimed the money back with interest, but agreement was reached to pay back only the nominal amount, Cobankovic said.
He recalled that the government had transferred 25 percent of LRH shares plus one share to the City of Opatija. Under the agreement to be signed with SN Holding, the agreement on the transfer of LRH shares to the City of Opatija will be considered null and void, however, the city will keep the shares because SN Holding recognises the ownership right over those shares of the Nova Liburnia d.o.o. company, which is owned by the City of Opatija, said Cobankovic.
The minister added that SN Holding would take over any possible obligations towards small shareholders which could arise from the agreement on the transfer of 25 percent of LRH shares plus one share to the City of Opatija.
Cobankovic recalled that the case was a long-lasting dispute dating back to the time of voucher privatisation.
So far SN Holding has held only 2.55 percent of LRH shares, while the HFP has held 58.58 percent of the stock. Nova Liburnija d.o.o., a company founded by the City of Opatija, has owned 25 percent of LRH shares, the Croatian Postal Bank (HPB) 0.58 percent, and the Croatia Osiguranje insurance company 0.55 percent.
The government's decision of today makes SN Holding the majority owner of the LRH.
The government today also adopted a decision on the implementation of the development project Brijuni Rivijera, entrusting state administration bodies to take all necessary measures to implement the project at the locations Pineta, Hidrobaza, and the island of Sveta Katarina - Mulimenti and Muzil.
The project Brijuni Rivijera is estimated at EUR 900 million and is expected to provide direct or indirect employment for 3,500 people, said Economy Minister Djuro Popijac.
