Radulović: EOS Group's offer failed due to the inability of the parties to agree on commercial terms

The offer received from EOS Group failed due to the inability of the parties to agree on commercial terms, and in particular because EOS Group representatives refused to constitute a mortgage on the ship (as a guarantee for the down payment), which is clearly evident from the email correspondence of the law firm hired by the board of directors of Crnogorska plovidba, Maritime Affairs Minister Filip Radulović announced today.

He said this after Vijesti reported earlier today that the management of the shipping company Crnogorska plovidba and the leadership of the Ministry of Maritime Affairs deceived the potential buyer of the company's ships, EOS Group from Turkey, that allegedly due to the annual vacation and the inaction of the courts in Montenegro, the mortgage on the ship "Kotor" could not be registered, which was the condition of the Turks to pay Crnogorska a down payment for the purchase of that and the ship "Dvadeset prvi maj".

Radulović stated in a statement that the Government of Montenegro made the decision to sell the ships "Kotor" and "Dvadesetprvi maj" after a comprehensive analysis of the business and technical condition of the fleet.

"The company has been operating unprofitably for years, the technical condition of the ships was not at an adequate level, and ultimately all of the above did not enable long-term sustainability. The company has constantly generated losses, and the accumulated liabilities to the state alone currently amount to approximately 37 million euros. Therefore, taking into account a number of facts, as well as real risks, the sale represented the only responsible and rational solution to prevent further accumulation of losses and devaluation of state property. The approximate value of the ship, according to the assessment conducted remotely, using the available technical documentation, i.e. the record kept on the ships, was estimated at slightly more than nine million US dollars. However, considering that the ship is in very poor condition, the offers received from the market were not at the level of the assessment conducted remotely. This was influenced by numerous factors: the technical condition of the ships, global market circumstances, reputation and financial risks, loss of the ship class, but also domestic media attention (flat-rate and unfounded in facts) which had negative repercussions on the state in Crnogorska plovidba and the value of the ships. Creditors and potential buyers have repeatedly referred to the information published in the media, which has made the negotiating position more difficult and reduced the real market offers," Radulović pointed out in a statement.

He added that the initial intention of the Board of Directors was to find a reliable strategic partner for the Montenegrin maritime sector.

"The offer received from EOS Group failed due to the inability of the parties to agree on commercial terms, and in particular because the representatives of EOS Group refused to constitute a mortgage on the ship (as a guarantee for the down payment), which is clearly evident from the email correspondence of the law firm hired by the Board of Directors of Crnogorska plovidba. Considering that the negotiations with EOS Group lasted too long, that during the negotiations there were changes compared to the initial offer, and that the postponement of the sale of the ships led to an increase in costs on a daily basis, the company entered into negotiations with other bidders. In further negotiations, the company communicated with the Greek bidder. However, their financial offer was low. After that, the Board of Directors decided to enter into negotiations with the Danish bidder Navision Group, whose terms were fair and transparent, and which undertook to implement the process quickly. This turned out to be correct, because the contract was signed on September 17, and that in started executing the agreement in a very short period of time without any problems," said Radulović.

According to him, the result of this process is that crew members and creditors from the United Kingdom and the United States of America have been duly paid.

Radulović also said that negotiations are underway regarding the surrender of the ship "Kotor".

"The Ministry of Maritime Affairs aims to preserve state property and return as many funds as possible to the state budget. The Ministry of Maritime Affairs performs its function in accordance with the regulation on the organization and manner of work of the state administration, and accordingly, it did not intervene operationally in the process of selling ships. In the part relating to the process of approving the sale (the allegations of the captains' association) are completely incorrect and show a misunderstanding of the regulations and the situation. The Government of Montenegro has reached conclusions that are fully based on the applicable regulations. The allegations of the captains' association are not unusual, considering that this association is headed by Mr. Janko Milutin (URA), who has never been a captain. We are talking about an association that has 5 members and whose credibility has long been known to the public," said Radulović.