The Montenegrin government has retracted its earlier approval for a €15 million loan arrangement between property developer Luštica Development and Alta Bank, based in Belgrade. This financing was intended to be secured by the company’s rights to utilize the marina and waterfront promenade at the Luštica Bay resort located near Tivat.
The loan agreement, which was proposed for a duration of five years, featured an initial fixed interest rate of 8.5%, which would decrease to 7.5% once the collateral was officially registered. Additionally, there was a provision for a 12-month grace period. The funds were earmarked to support permanent working capital needs.
Initially approved on June 29, the government’s decision was reversed during a telephone session on July 28, when it instructed the Ministry of Spatial Planning, Urbanism and State Property to remove the security interest from public records. The government cited new legal and factual circumstances as reasons for this withdrawal but did not provide further details.
The collateral in question related to Luštica Development’s rights over the marina and waterfront promenade situated on state-owned land in Radovići, Tivat. Should the company have defaulted on the loan, Alta Bank would have had the potential to gain access to these properties.
Currently, it appears that this borrowing initiative has either been abandoned or is advancing without the previously proposed marina collateral. Luštica Development has stated that it does not have any existing loan arrangements with Alta Bank.
Financial records from Luštica Development indicate that as of 2025, the company had previously secured €10.65 million from Alta Bank through three long-term loans totaling €4.15 million, €3.5 million, and €3 million. Overall, its long-term borrowings amounted to approximately €47.72 million, with €26.19 million due within the current financial period.
At the end of 2025, Crnogorska Komercijalna Banka emerged as Luštica Development’s largest lender, with outstanding debts of about €24.31 million. The average interest rate on its long-term loans was recorded at 6.23%, secured through mortgages and promissory notes.
In December 2025, Luštica Development also entered into a separate investment loan agreement with AIK Bank from Serbia for €35 million, disbursed in two tranches of €20 million and €15 million in January 2026. This financing was secured by mortgages and rights over construction plots, alongside receivables and shares held by Orascom Development Holding, which provided a corporate guarantee.
As of late 2025, Luštica Development had accumulated €11.35 million in short-term loans from Montenegrin banks. The company’s total liabilities were reported at €47.68 million, while advance payments received from buyers for various properties totaled €32.51 million. The firm recorded an after-tax profit of €574,487 for that fiscal year.
Luštica Development is primarily owned by Orascom Development, with the Montenegrin government maintaining a stake of just under 10% in the company.
