Rescue plan for the Igalo Institute on the agenda for tomorrow's Cabinet session

The third session of the Montenegrin Government's Commission for resolving the status of the Institute for Physical Medicine, Rehabilitation, and Rheumatology "Dr. Simo Milošević" took place today, following a series of consultative meetings and a working meeting with the management and representatives of the Institute's unions held on 18 March 2024 in Igalo.

In addition to the Commission members, representatives from the "Dr. Simo Milošević" Institute, Stevan Katić, the President of the Municipality of Herceg Novi, a representative from the Competition Protection Agency, and the Protector of Property and Legal Interests attended the session.

Upon the Prime Minister's proposal, the Rescue and Restructuring Plan has been expanded with two new steps. Namely, it was decided that in the first step, an assessment of the Institute's value will be made by an independent appraiser, and based on this assessment, the Government will approach minority shareholders with an offer for either (1) buying their shares or (2) their proportional financial participation in the rescue and restructuring package for the Institute.

Since the Commission has defined all the steps towards rescuing the Institute, which have been presented to the Prime Minister, the Institute's management, and representatives of the Institute's unions, along with the conclusions from today's meeting regarding asset assessment and the involvement of minority shareholders in the entire process, a comprehensive presentation of the Rescue and Restructuring Plan for the Institute will be included in the Cabinet's regular session agenda tomorrow.

Regardless of the response from minority shareholders, the Government will be in a position to take a final and official stance on the Rescue Plan proposed by the Commission, which has the highest degree of consensus and is fully aligned with the rules and principles of state aid allocation. As a reminder, the Rescue and Restructuring Plan or rebranding of the "Dr. Simo Milošević" Institute includes three steps: a small value aid of €300,000 to ensure continued operation (de minimis), followed by assistance of up to €10 million for six months to unblock accounts, continue operations, and ensure liquidity, with the obligation to develop a quality restructuring plan within those six months by a reputable global agency, which will undergo approval procedures by competent authorities and receive permission for implementation. This will create conditions for multimillion-dollar investments in further revitalization and rebranding of the Igalo Institute.

Such a plan not only addresses the acute crisis facing the Institute but also opens up opportunities for expanding and improving operations in all segments, both in the medium and long term. In this way, the Institute could refresh its existing brand and enhance its competitiveness in the international market.

As stated multiple times, the Government has no strategic dilemmas regarding the Institute's rescue plan, with the imperative that the solution must be within legal frameworks and in line with the best European practices, and with the condition that minority shareholders express their role and potential financial participation from the outset in implementing the proposed rescue plan.