The Croatian shipyard that built the largest square rigger in the world, Golden Horizon, has temporarily suspended production because of a financial squeeze caused by the Ukraine war.
It is the first time in the 90-year history of Brodosplit that this has happened, reports say. Around 200 workers have turned up at the yard in Split today but they are believed to be office staff. Another 1,600 employees have been told to stay at home and production has halted.
The problem has arisen because VTB Europe, the Russian-owned bank in Frankfurt which financed the building of Golden Horizon and another ship, Janssonius, has been targeted by international sanctions, freezing 60million euros destined for Brodosplit.
The yard has made an urgent appeal for the Croatian government and state bank HBOR to bridge them over the financial gap.
‘We have survived many challenges – a pandemic, non-payment of our own claims – but we are stuck on this,’ said PR manager Josip Jurišić, quoted by Croatian website HRT.
‘We are financing two projects with loans from VTB Bank, which is owned by Russia and has stopped all payments due to the war in Ukraine. We spent our own funds, we do not have funds from the loan and we had to stop production. We are asking for loan refinancing. We expect a reaction from the government today.’
When asked what would happen if the aid wasn’t given, Mr Jurišić said he didn’t want to think about it.
In a later email to me, he wrote: ‘This crisis in Ukraine and the problem with VTB happened at a time of extremely good prospects for Brodosplit. We have contracted several new projects worth around 270million euros, including the construction of a polar cruiser and a luxury yacht, plus military ships for export, and are in the final phase of negotiations for the construction of two more yachts and a residential ship worth about a billion euros [Storylines ship Narrative].
‘We currently have a problem because we have not yet received state guarantees, which is related to the situation with VTB Bank, so these contracts have not been strengthened for five months. We hope that the problem will be resolved soon. Otherwise, the projects would fail, which would be detrimental to both Brodosplit and the Croatian economy.’
Company president Tomislav Debeljak told Croatian news website Jutarnji List: ‘We have been hit by force majeure due to the war in Ukraine. Because VTB is owned by Russia, it is subject to significant restrictions. The situation we have found ourselves in is extremely dramatic because VTB has stopped all further payments on all loans, which has blocked us.
‘We have not yet received an answer from either the government or HBOR, but I hope we will.’
Golden Horizon is operated by Tradewind Voyages in Suffolk, a subsidiary of Brodosplit. The line announced this week that it was pushing back the start of the ship’s 2022 season from May until late July, in part due to the Ukraine war.
Brodosplit is also expected to cut the first steel for the Storylines ship Narrative this year.
For my previous stories on Golden Horizon, please click here