Croatia to sell struggling shipyard

(ZAGREB) - The Croatian government decided on Thursday to sell the loss-making Brodotrogir shipyard, one of several that the Balkan country has to restructure before joining the European Union next year.

Of the two local bidders "we chose the proposal that ... guarantees that industrial production, production of ships, will continue," Prime Minister Zoran Milanovic said.

A more than 95 percent stake in the wharf, located in the central coastal town of Trogir, will be sold to the Kermas Energija firm for the symbolic price of 1 kuna (0.13 euros, 0.16 dollars).

The shipyard's restructuring cost was estimated at more than five billion kunas (665 million euros, $815 million) of which the state would provide three billion kunas, a government decision said.

Kermes Energija pledged to maintain the wharf's core business, but also build a business-tourism zone and a marina.

Restructuring its heavily subsidised shipyards is a key issue Croatia must resolve before entering the 27-nation bloc in July 2013.

Of Croatia's five state-run shipyards, one -- Kraljevica -- has filed for bankruptcy and earlier this year the government decided to sell the largest, Brodosplit, to local company DIV.

At Uljanik, the only wharf that actually turns a profit, the government set up a scheme for employees to buy its shares.

Croatian shipyards employ over 10,000 people but are estimated to have accumulated losses amounting to some 3.7 billion euros during the past 20 years.