The government of Montenegro has rescinded its earlier approval for Luštica Development to use rights over a marina and waterfront promenade as collateral for a €15 million loan from Alta Bank, based in Belgrade. This decision marks a significant shift in the financing plans for the development project.
This five-year loan facility was designed to support working capital and included a grace period of 12 months. The loan carried a fixed interest rate of 8.5% annually, which would reduce to 7.5% upon the registration of the security.
Initially approved on June 29, the government reversed its decision approximately one month later. It instructed the property ministry to remove the lien from public records, citing unspecified “legal and factual circumstances” without providing further details.
The proposed security would have granted Alta Bank rights over the Luštica Bay marina and the adjacent promenade near Tivat in case of default. These assets are situated on state-owned coastal land, requiring government consent due to the developer’s usage rights.
Luštica Development, which is controlled by Orascom Development Holding based in Switzerland, with the Montenegrin state holding a minority stake, informed local media outlet Vijesti that it currently has no credit arrangements with Alta Bank. Nevertheless, its financial statements for 2025 indicated €10.65 million in outstanding long-term loans from the Serbian bank across three separate facilities.
As of the end of 2025, Luštica Development reported total long-term borrowings of €47.7 million, which included €24.3 million owed to Montenegro’s CKB bank. Additionally, in January 2026, the company secured €35 million from another Serbian lender, AikBank. This recent reversal disrupts one aspect of its financing strategy while maintaining Luštica Development’s overall dependence on secured bank loans.
