Gov't approves state collateral for Petrokemija to seek loan

Croatia's caretaker government on Wednesday approved state collateral for the Petrokemija artificial fertiliser company so that it can take a 200 million kuna loan from the Croatian Reconstruction and Development Bank (HBOR), to be used for restructuring and consolidation, and gave its consent to the Environmental Protection and Energy Efficiency Fund to overdraw its transaction account at the Croatian Postal Bank in the amount of HRK 100 million to maintain current liquidity.

The HBOR loan to Petrokemija is in Croatia's economic interest because 79.85% of the company's shares are held by the state and the company is the main producer of artificial fertilisers in Croatia and an important competitor on the regional market, said Finance Minister Zdravko Maric.

He said the loan would be used to refinance the company's existing liabilities and create conditions for a better negotiating position in relation to suppliers of natural gas as well as for the financial consolidation of the Kutina-based company.

The state collateral will make it possible for the company to obtain the loan at an interest rate that will enable more competitive production and sales and loan repayment, Maric said, adding that Petrokemija last borrowed at an interest rate of 8-8.5%, while the loan to be taken now would have an interest rate half that rate.

The overdraft for the Environmental Protection and Energy Efficiency Fund was approved for a period of one year.

In the first half of this year, the Fund earned HRK 552 million, while its expenditure totalled HRK 896 million. When surplus revenue in the amount of HRK 248 million from 2015 is added to this amount, the Fund is left with a loss of HRK 96 million, said Environmental Protection Minister Slaven Dobrovic.

Some media reported lately that the Fund owes between HRK 50,000 and more than a million to contractors who have joined in projects for the energy upgrading of family houses, which has put it into a difficult financial situation. The Fund had reportedly paid for the services done within 30 days from their completion until spring this year, and by summer there was no more money available.

The government today also approved loans for five municipalities and the town of Velika Gorica.

Last update: Wed, 31/08/2016 - 11:53

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