Council for Privatisation: Adriatic Marinas fully meets obligations from its investment programme

Podgorica, Montenegro (20 June 2014) – At today's session, Montenegro’s Council for Privatisation and Capital Projects, chaired by Prime Minister and the Council’s President Milo Đukanović, considered the information on fulfilling the minimum investment obligations by the company "Adriatic Marinas", defined by the Agreement of buying, selling and investing in the property of the Naval Technical Repair Bureau "Sava Kovacevic" in Tivat and the House of Army (Porto Montenegro).

The Council concluded the Adriatic Marinas has complied with all contractual obligations and exceeded the amount of mandatory investment in Porto Montenegro, as evidenced by the fact that in the period June 2007 - September 2013, the company invested EUR 164,094.335 million, compared to the binding EUR 106,000.000. This has created conditions for the buyer and seller to sign a confirmation making the buyer eligible to sell or dispose of the purchased property and sell more than 49% stake in the company.

The Council also discussed the sole bid submitted in the tender for sale of 61.5749% of the share capital of the “Adriatic Shipyard”in Bijela by Netherlands’s Damen Shipyards Group.

After examining the submitted documents, it was stated that the offer of the consortium does not meet the requirements for participating in the tender, as it is focused on the purchase of the property, and not the shares of the company, as defined by the tender. Furthermore, the company from the Netherlands has not submitted neither the bank’s guarantee as a mandatory element of the bid nor the statement that within 18 months from the date of signing the contract the bidder is to meet all EU environmental standards and Montenegro’s regulations, and unconditionally accept the resolution of redundancy for a three-year period, in accordance with the existing collective agreement.

Since this offer is not aligned with the conditions and requirements for taking part in the tender and instructions for submitting bids, the Council accepted the decision of the Tender Commission and rejected the offer. The Council suggested that following the fourth unsuccessful tender procedure, the solutions to the sale of the company’s assets should be found through a programmed bankruptcy procedure, thus improving prospects for the Shipyard’s privatisation.

The Council also addressed the sole bid submitted in the public tender for long-term leasing of land and sea surface area at the location between Njivice and Sutorina River mouth by the consortium consisting of the LLC "Lime Production" from Moscow and "Billport Finance Corp" from Panama, which was found legally defective.

According to the Council, the bid does not meet the qualification requirements, since the consortium has not submitted the evidence regarding the value of its capital of at least 50 million, as well as the evidence of positive financial results over the last two years and the total turnover of at least EUR 30 million in the previous year.

At its sitting on Thursday, the Council for Privatisation and Capital Projects determined the draft annex agreement on land lease for the construction of golf courses in the municipality of Tivat, explaining the annex gives the investor (Boka Group) another chance to meet its financial obligations in order to resolve the outstanding property issues and create favourable conditions for the start of the investment.

The Council also gave its approval to the draft terms of reference for controller for monitoring implementation of privatisation contracts in the field of tourism and tasked the Tender Commission for Valuation of Tourism Locations to launch the appointment procedure at the earliest possible time.