EU-bound Croatia privatises ailing shipyard

(ZAGREB) - The Croatian government on Saturday privatised an ailing wharf as part of moves to restructure its shipbuilding sector in line with conditions for its entry into the European Union in July.

"We have managed to preserve Croatia's shipbuilding .... upon new (EU) rules," Prime Minister Zoran Milanovic was quoted by national HRT television as saying at the signing of a deal to sell the loss-making Brodotrogir shipyard to local firm Kermas Energija.

The company bought a stake of more than 95 percent in the wharf, located in the central coastal town of Trogir, for the symbolic price of 1 kuna (0.13 euros, $0.17).

It must now invest some 270 million euros in its restructuring.

Restructuring of Croatia's heavily subsidised shipyards is one of the key issues Zagreb has had to resolve ahead of becoming the European Union's 28th member on July 1.

More than 10,000 people are employed in the shipyards, which are estimated to have accumulated losses of about 3.7 billion euros over the past 20 years.

Last month Croatia privatised its largest shipyard, Brodosplit, and is expected to complete the sale of the sole remaining state-owned shipyard in the northern port of Rijeka soon.