Russians move in for Croatia`s bankrupt Viktor Lenac yard
ByLine: Timing of deal could be delayed, write Ed Holt and Hugh O`Mahony
RUSSIAN heavy industry and energy giant Obedinennye Mashinostroitelnye Zavody has announced it will next week make an
offer to the Croatian government to purchase the northern Adriatic shipyard Viktor Lenac near Rijeka.
OMZ's representative in Croatia, Marijan Tuskan, has said his company would agree to employ 650 workers for an
average monthly wage of around GBP350, invest GBP5.4m ($9.6m) in Viktor Lenac over the next two years and agree with the
government on using Croatian companies in the construction of an oil plant in Kazakhstan.
He has refused to reveal the price the company plans to offer for the yard, but the country's best-selling
newspaper, Vecernji List, said OMZ was likely to offer GBP3.5m, basing its estimate on what it said were sources close
to the deal.
Mr Tuskan said: ''The main reason why OMZ wants to buy Viktor Lenac shipyard is the fact that it would be
possible for the Russian fleet to be docked here 12 months a year.
'That is obviously not the case in some other companies' shipyards because of all the ice in the cold
winters.'
OMZ has previously been linked in the media with considerably higher valued bids for the Viktor Lenac company. But
those previous offers included other parts of the business, Dock 11 and the Vranjic shipyard. OMZ has said it is no
longer interested in investing in Dock 11 or the Vranjic yard.
OMZ officials confirmed negotiation to buy facilities at Viktor Lenac, but added that internal issues were likely to
delay the timing of any deal for at least a month.
OMZ director of shipbuilding Mikhail Aivazov said the industrial group had set in motion plans to offload OMZ Onshore
' Offshore, which controls the group's five shipyards, design bureaux in Ukraine and the US and two oil and
gas engineering companies, to a management buyout team.
The company had been valued at Rbls1.45bn ($52m) and its sale will finance OMZ's expansion in power generation
equipment.
'One of the most serious obstacles we face in investing in Croatia is the situation here at OMZ,' he said.
'There are difficult questions from the legal and financial points of view.'
The management buyout could take a year and was only the first part of the process needed to be complete for other
investments to be considered, he said.
In the first instance, seven top managers, among them Mr Aivazov, are acquiring 85% of shares. These will then be
distributed between 40 company managers. The second stage should be complete within one month.
OMZ has estimated that the company could see revenues as high as GBP38m a year at the Viktor Lenac yard.
The Lenac yard is at present in bankruptcy proceedings.
The yard declared bankruptcy in December last year with reported debts of GBP134m and more than 1,700 creditors.
But officials from the yard maintain that it is one of the premier ship repair-conversion-offshore shipyards in the
Mediterranean region.
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