In the first half of the year, Barska Plovidba reported a loss of €723,560, which is a decline of €1.82 million compared to the same period last year when the company recorded a profit of €1.09 million after the first two quarters.
Recent reports indicate that Barska Plovidba was unable to make its second loan payment of $1.83 million to the Chinese Exim Bank in July. The funds intended for this payment were instead used for ship repairs, leading the government to cover the payment from the state budget.
Earlier this year, Barska Plovidba managed to pay its January installment of $1.87 million to the Exim Bank independently. However, the government had already warned that the company would struggle to make the July payment without assistance.
Last year, Barska Plovidba successfully paid two loan installments totaling $3.72 million on its own. The loan is for the purchase of the vessels “Bar” and “Budva,” which are backed by a government guarantee.
This loan, taken out from Exim Bank, became effective on March 7, 2013, with the ships built at Jinling Shipyard in China and delivered in September and October 2014. Since then, they have been on time charter. The total loan amount was $46.4 million, with an interest rate of 2%, resulting in an overall obligation of $58.09 million to Exim Bank.
Shipping companies have been facing ongoing challenges, managing regular obligations and loans while also repaying unaligned state aid. The Agency for Competition Protection (AZK) previously stated that state involvement in repaying loans for four vessels belonging to Barska and Crnogorska Plovidba constitutes illegal state aid.
Recently, media outlets speculated about the possibility of bankruptcy for Crnogorska Plovidba, but Minister of Maritime Affairs Filip Radulović denied this, stating that the ministry had not made any decisions regarding bankruptcy.
He acknowledged that both shipping companies are in a difficult financial situation, but final decisions regarding their futures will come after an analysis by the Faculty of Economics. Radulović emphasized the necessity of addressing their obligations to the state.
“We need to find solutions to meet those obligations. Several professors from the Faculty of Economics are currently analyzing both companies. Once that analysis is complete, we will have options for how to proceed. It’s important to clarify that recent media reports suggesting a decision to push Crnogorska Plovidba into bankruptcy are completely unfounded,” Radulović stated.
Notably, he had previously intervened to prevent the payment of bonuses to certain board members and management of Barska Plovidba at the end of January.
In an earlier interview, Radulović expressed support for the merger of the two Montenegrin shipping companies.
“I will work towards creating conditions for the restructuring of the shipping companies, likely through a merger of Barska and Crnogorska Plovidba. To begin this process, both companies must first meet the conditions set forth in the Law on Business Entities, ensuring that their assets exceed their liabilities. Given the need for both companies to repay unaligned state aid while also servicing their loan obligations to Exim Bank, a serious and responsible approach is required to create the legal framework for restructuring. Ultimately, restructuring is not an end goal; our primary objective is to establish a sustainable shipping company capable of servicing its obligations and continuing to grow and develop its operations,” Radulović added.
Crnogorska Plovidba is wholly owned by the state, while the state holds approximately 52% of the shares in Barska Plovidba.
