"Budvanska" takes over part of the hotel?

The "Budvanska Rivijera" hotel group and the "Euromix-trade" company will conclude an agreement before a notary at the beginning of next week that will, after a full decade, resolve the problem of completing the "Cristal Rivijera" hotel in Petrovac.

This was unofficially confirmed to "Vijesti" by the largest hotel company in Montenegro, which is majority owned by the state.

"Budvanska rivijera" received the necessary approvals, both from the bank, the local government and other institutions, which were needed for the agreement, which was defined back in February of this year, to be finally verified before a notary, and for "Euromix" to be obligated to fulfill precise conditions.

The management of HG "Budvanska rivijera" reached an agreement whereby "Euromix" committed to settle debts under a loan it took out eight years ago or to hand over ownership of the "A2" facility of the hotel complex with 26 hotel units, whose value is estimated at around six million euros.

Once the agreement is signed before a notary, "Euromix" has 90 days to pay "Budvanska Riviera" 2,7 million euros, otherwise the state-owned company will take over the hotel.

Euromix took out this loan from the Investment and Development Fund (IDF), but did not repay it; instead, it was paid by Budvanska rivijera, which was a co-debtor. The IDF was transformed into Razvojna banka at the end of last year. In order for the agreement to be signed before a notary, the consent of that bank was also required.

"Euromix" had previously stated during extensive negotiations that it had secured a partner who was ready to enter the entire project and finally complete the hotel complex right next to Petrovac beach.

The joint venture agreement between “Budvanska Riviera” and “Euromix” was concluded at the end of May 2011. It stipulates that out of a total of 269 accommodation units in the future hotel, 48 will belong to the separate “Cristal” hotel and will be transferred to the ownership of “Budvanska Riviera”.

Only at the end of March 2014 did the then Ministry of Sustainable Development and Tourism issue a building permit for the reconstruction of the “Cristal Riviera” hotel, and the deadline for completion of the works, in accordance with the joint construction contract, was set at September 27, 2016. In the contract, “Euromix” undertook to functionally separate the capacities belonging to the “Budvanska Riviera” hotel in a separate construction wing towards the “Palas” hotel and to equip them according to the standards for a five-star hotel category.

A loan agreement was concluded between the former IRF and the company "Euromix" in December 2017, which stipulated that the approved funds would be used to complete the construction and operation of the hotel.

On the same day, a debt accession agreement was concluded between IDF and "Budvanska rivijera", all in connection with securing a loan of 4.000.000 euros.

Since “Euromix” did not settle its obligations under the loan agreement concluded with IDF, “Budvanska rivijera” paid it.

After several years of negotiations, the two companies managed to reach an agreement at the end of 2024, which was previously given the green light by the Board of Directors of HG "Budvanska rivijera".

The agreement regulating mutual rights and obligations between the two companies, which will be signed before a notary, which "Vijesti" has had access to, clearly stipulates that the two parties will drop the court proceedings that have been ongoing for the past several years.

The debt based on the loan taken from the former IRF, according to the agreement from February, is defined as "Euromix" owing "Budvanska Riviera" 2,7 million euros.

The total principal amount of 2,55 million euros that "Budvanska rivijera", as a borrower of the loan debt, has already paid instead of "Euromix" by 31 October 2024, as well as the amount of 156 thousand euros, consisting of three annuities, which "Euromix" is obliged to pay. In addition, "Euromix" is obliged to pay "Budvanska rivijera" the corresponding interest at a rate of four percent per annum, starting from the date of each individual payment by the state-owned company.

When it comes to the method of repayment of the debt based on the loan taken from IRF, the agreement states that “Euromix” will repay the total debt to “Budvanska Riviera” within 90 days of the conclusion of the agreement. As security for this, “Euromix” has undertaken to provide a pledge statement on the basis of which “Budvanska Riviera” will establish a mortgage on the “A2” facility.

If "Euromix" does not settle its obligations within the stipulated 90 days, the "A2" facility with 26 hotel rooms will become the property of Budva Riviera.

By concluding the agreement, "Euromix" will also sign a statement that if it fails to fulfill its obligations, it irrevocably and unconditionally authorizes "Budvanska Riviera" to be registered as the exclusive owner of the "A2" facilities.

The value of this part of the hotel complex is many times greater than the loan amount.