Croatia Selling State Assets to Raise Cash

Croatia's State Office for State Property Management, DUUDI, has launched a campaign to sell off state property and raise cash to fill budget holes.

The DUUDI has already launched tenders for three state-owned hotels, the Imperial on the island of Rab and the Maestral and Plat, in Dubrovnik, all running at a loss.

On the Zagreb stock market on Friday, shares in Imperial fell by 7.1 per cent, and in Maestral by 28.4 per cent.

The DUUDI has also put the state-owned shipping company, Jadroplov, and the Rijeka shipyard Treci Maj up for sale. Shipyards in Croatia are a persistent financial headache for the state, as they all now depend on state subsidies.

DUUDI head Mladen Pejnovic also announced sales of the port of Ploce, the Postal Bank, HPB, the industrial Koncar company and the state's remaining 3.5 per cent stake in Croatian Telekom, HT, the biggest communications operator in Croatia, which was sold back in 1999 to German Deutsche Telekom.

HPB was put up for sale last year but it did not go through. The sale is seen as complicated as it depends on cooperation with the Croatian National Bank, HNB.

Pejnovic said the DUUDI is planning to raise around 400 million euro from sales of state assets.

The DUUDI has already started "Project 100", whereby it is offering 100 items of real estate to Croatian citizens.

One is Goli Otok, a notorious prison camp from the Communist era, whose potential sale has resulted in public criticism.

Pejnovic said income from state property in 2013 hit a record high. However, the profit does not match the estimated worth of the assets in question. The Croatian state has an enormous property portfolio, worth a total of 31.4 billion euro.