State property office to continue privatisation process, says official

ZAGREB, 6.7.2016.

The Restructuring and Sale Centre (CERP) will next week decide on the sale of hotels owned by the Imperial company and could continue with the privatisation of those state-owned companies where procedures have already been started, the head of the State Property Management Office (DUUDI) Tomislav Boban said on Wednesday, while Finance Minister Zdravko Maric believes that the privatisation plan is facing challenges.

CERP's management should decide next week about an offer made by the Valamar Riviera company to purchase 50.08% of the state's shares in the Imperial hotel company on the island of Rab. A deadline for bids for the Dubrovnik Maestral Hotel will be extended by 60 days, Boban said ahead of a cabinet meeting.

"The only bid for the Imperial shares that came within the deadline by July 5 was a binding offer submitted by Valamar. Valamar offers HRK 260 million which is a little more than the asking price and I believe that the management board will accept that offer, most likely next week, because we still have some consultations to conduct in the government regarding that matter over the next few days," Boban told reporters.

He underscored that he was pleased with Valamar's offer. "Valamar is known as a large investor in Croatia's tourism and we are pleased they have submitted a bid. That's a 'win-win' situation," Boban said.

Given that this is a caretaker government, reporters asked whether privatisation would continue as defined two or three months ago. "We've sent a memo to the government asking what DUUDI and CERP should be doing in this situation," Boban said.

"Everything that's been started, including bids expected for the Maestral Hotel, will continue while some other projects will have to wait for the new government," he said.

The deadline for the submission of binding bids for the purchase of 68.26% of state shares in the Dubrovnik Maestral Hotel with a starting price of HRK 109 million expires on July 11. If that deadline is to be extended by 60 days, which is something CERP's management board has to decide, everything would be prolonged for September 11,  which is a possible date of the snap election.

Commenting on the continuation of the privatisation process which should reduce public debt, Finance Minister Maric said that "the plan now is facing certain challenges, we've managed to do something but some things will most certainly be brought into question."

He reiterated that this year he would do his best not only to stabilise but also to lower the share of public debt in Gross Domestic Product (GDP). Recently we saw that in Q1 this year the public debt fell on the year for the first time since 1999.

"I consider that to be a very good message to the domestic public," Maric said.

Maric added that procedures were launched today for a new loan on the domestic market. "Things are going in the right direction and I still believe that the transaction will be a success," Maric said. (Hina/FaH)