Government ready for compromise to save the Institute: Funds secured for investments, minority shareholders presented with two options

Following today’s session of the Shareholders' Assembly of the "Dr. Simo Milošević" Institute, where the Government of Montenegro is the majority shareholder, we would like to inform the public of the following:

The 44th Government of Montenegro, led by Prime Minister Milojko Spajić, has undertaken concrete actions to save this valuable healthcare and rehabilitation resource after years of operational challenges at the Institute. The first measure was a 100% increase in the rate for patients covered by the Health Insurance Fund, which will secure an additional €4.5 million annually from the state budget for the Institute, ensuring liquidity in its operations.

Cumulative liabilities exceeding €20 million, deteriorated facilities, and outdated equipment—caused by the inaction of previous administrations—have pushed the Institute to the brink of bankruptcy. Unlike the approach taken in 2018, when the government sought to fully privatize the Institute through a tender process, the 44th Government will not allow the state to lose its majority stake, given the Institute's irreplaceable significance.

Guided by a strategic approach and in collaboration with the University of Montenegro, the Government has developed a Restructuring Plan, which represents the only viable path forward under the Law on State Aid Control.

The Restructuring Plan proposes two paths:

1. State buyout of minority shares: The Government would acquire shares from all minority shareholders to achieve a two-thirds ownership share, enabling unhindered decision-making.

2. Joint investment: The state would invest funds, with the Institute and minority shareholders required to jointly secure 40% of the total investment on a market basis.

The Government is prepared to pursue either scenario, as evidenced by the allocation of funds for the Institute’s recovery already included in the 2025 State Budget. Claims made today by a minority shareholder, suggesting that "the Government has agreed not to sell Phase I," are unfounded. Given the Institute’s accumulated debts, selling Phase I remains the only viable option if minority shareholders opt not to participate in the Restructuring Plan.

Thus, the Institute can be salvaged either through state investments, enabling the Government to secure a two-thirds ownership share, or through a collaborative investment approach with minority shareholders, in a 60:40 ratio.

Should minority shareholders choose to collaborate with the Government, the state is fully open to compromise solutions that benefit all stakeholders, including shareholders, employees, the city of Herceg Novi, and the entire country. This commitment is evident in the Government’s proactive and constructive efforts to address this complex issue, which arose from poor decisions made in the past.