The first phase of the Igalo Institute "on the drum" for 28 million

After the sale of the buildings, the right of use would be converted into the right of ownership over the land. For the sale to take place, a two-thirds majority is needed, which the government does not have, unless it buys shares from small shareholders.

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Sale of shares is the last option: From yesterday's "Vila Oliva" press, Photo: Luka Zekovic
Sale of shares is the last option: From yesterday's "Vila Oliva" press, Photo: Luka Zekovic
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

The government intends to sell the first phase of the "Dr. Simo Milošević" Institute in Igalo and use that money and with an additional loan to reconstruct the second phase and bring it to the level of four stars. The first phase would be sold for 28,25 million, and the loan would be taken in the amount of 14,46 million. After the sale of the buildings, the right of use would be converted into the right of ownership over the land.

This is foreseen in the Restructuring Plan, which was prepared for the needs of the Government by a team of the University of Montenegro and which the Government still does not want to present to the public until it is adopted at the Assembly of Shareholders of the Institute.

The first phase of the Institute that would be sold is located on the foam of the sea, and in order for the sale to take place, a two-thirds majority is needed, which the Government does not have unless it buys shares from small shareholders who have 43,5 percent of the share capital. The government has 56,5 percent ownership.

The largest individual minority shareholder is the company "Vila Oliva", of which he is one of the co-owners Zarko Rakcevic who disclosed the details of the Government's plan yesterday with the message that he will not support it at the Shareholders' Assembly if the scenario of selling the first phase of the Institute remains.

Rakčević claims that the Institute can survive even without the planned sale of the first phase and the children's school, and that the state aid of 69 million euros for the reconstruction of the second phase is excessive.

"We are against the sale of the first phase. We will not give consent for that. We think that there are credible alternative scenarios that can ensure the salvation of the Institute", said Rakčević.

He stated that the Plan was conceived in such a way that, instead of talking about the affirmation of private-public partnership, it sets the goal of immediately pushing out minority shareholders in January 2025, because the proposed measures, as the authors of the Plan point out, are so financially demanding that "it is irrational and economically illogical expect that the minority shareholders will proportionally participate in the distribution of the burden through the Plan.

"The first step implies that all minority shareholders, 43,5 of them, will be settled with 9,6 million, and then that the first phase - the main building, solitary confinement, E ward and the children's ward - will be sold for three times the amount of 28,26 million. When those buildings are sold at the beginning of 2025, then immediately next year the conversion of the right of use into the right of ownership over the land, which the minority shareholders have been insisting on for years, will be resolved. We believe that then there will be no problem for the Institute to borrow 14,68 million." Rakcevic said.

He pointed out that it is not reasonable to propose that for block A of the second phase, an average of 63.000 euros of investment per accommodation unit should be foreseen.

"Our point of view and experience tell us that it is not reasonable to give 54.803 million state money or participate in recapitalization for the reconstruction and adaptation of the second phase of the net area of ​​9,7 square meters. So, only for adaptation and reconstruction, bringing it to the level of 4 stars, 1270 euros per square meter. Draw a parallel with the project value of building an apartment on Velje brdo of 1000 euros per square meter. What is happening in the plan, that is, with the restructuring measures with Tito's villa "Galeb" with a net area of ​​5712 square meters, with the Inex restaurant, the Institute's apartments, auxiliary facilities..." said Rakčević, adding that with an interest-free loan of five million and a partnership with The government prevented bankruptcy.

He said that they share the view of the author of the Plan that at this time the threshold for profitable operation of the second phase of the Institute is 13,5 million.

"We are convinced that with the reasonable decision of the Government and the increase in the prices of the Institute's services, which we welcome, it will not be a problem already in the first year before the necessary raising of the category and rebranding with 100.000 pension days of fund patients and with income from third parties to get the Institute out of the zone of negative business", he said. is Rakčević.

The first step of the Plan implies that all minority shareholders, 43,5 percent of them, settle with 9,6 million, and then that the first phase - the main building, the solitaire, the E department and children's department

HTP Oliva in order to prevent bankruptcy, as announced in the press, as an option, can support the decision on open recapitalization - issuance of new shares in the value of 23,5 million and proportionally participate in the procedure that would cover all due obligations in a partnership and responsibly and once again saved the Institute from bankruptcy.

"We are ready to invest additionally and cover the Institute's due obligations, i.e. losses in the amount of 8 million, in proportion to our ownership. This scenario implies the selection of a professional board of directors, an executive director, a partnership relationship of shareholders and full transparency of operations," Rakčević said.

He called on the authors of the plan and the majority owner to accept the proposals of minority shareholders based on the laws of Montenegro and European experience, to make the necessary corrections and to put the Institute on a sound footing in a partnership and fair manner.

Answering the question of the "Vijesti" journalist whether he will sell the shares, Rakčević said that it is the last option.

"For us it is the last option. We are ready to make our contribution", Rakčević said.

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