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Hrvatski Engleski

The Act on the Management and Disposal of Assets owned by the Republic of Croatia

The Croatian Parliament passed at its session of 15-07-2013 the Act on the Management and Disposal of Assets owned by the Republic of Croatia (hereinafter: "the Act") which has entered into force on 30-07-2013.

The Act provides the shutdown of the Government Asset Management Agency and the transfer of its powers to the following bodies:

  • State Office for State Assets Management (hereinafter referred to as "State Office") as the central body of management and disposal of state assets, which acquires power of management and disposal of real estates and shares in strategic companies (currently there are about 55 of such companies)
  • Restructuring and Sale Centre (hereinafter referred to as "the Center") which as a new body that acquires the power of management of the minority shares whose holder is the Republic of Croatia in companies which are not declared as companies of strategic interest for the Republic of Croatia (there is currently over 500 of such companies)

In order to achieve better monitoring over the management of companies of strategic and special interest for the Republic of Croatia, the Croatian government appoints the Commission of Croatian Government for the Management of the Strategic Companies (hereinafter referred to as "the Commission") with the authority to review the reports, plans and restructuring of companies and proposing members of management and supervisory boards of these companies.

One of the goals of the Act is to establish the most efficient system for the implementation of the Government Asset Management Strategy which includes the sale of numerous minority shares of state assets scattered throughout various government departments, with the aim of privatization of unprofitable state shares.

In this regard, the Act specifically prescribes ways of managing and disposing of state assets in the form of real estates, stocks and shareholdings.

1. The basic ways of disposing of real estate owned by the Republic of Croatia are:

a) public tender and public collection of offers

In the public call for public tender or public call for public collection of offers, the rules and conditions that bidders must meet are published, as well as the deadline for the submission of the application or offer within 60 days of publication of the call. The best bidder is considered to be the bidder who offers the highest price, with which the head of the State Office concludes a purchase agreement within 30 days of obtaining a positive opinion of the competent State Attorney Office. The buyer is obliged to pay the purchase price within 30 days of the conclusion of the said agreement.

b) exceptionally, without public tender or public collection of offers

This procedure applies when the ownership of real estate managed by the State Office is acquired by units of local and territorial (regional) self-government and legal entities owned or majority-owned by the Republic of Croatia or legal entity owned or majority-owned by a unit of local and territorial (regional) self-government, if it is in the interest and goals of general economic and social progress of its citizens or if it is a real estate on which an investment project is being realized, which is declared as strategically important for the Republic of Croatia.

c) donation

Real estates owned by the state can be donated to units of local and territorial (regional) self-government, to companies whose sole founder and owner is the Republic of Croatia and to the institutions one of which founders is the Republic of Croatia. Stated real estates are donated for the purpose of: (i) the realization of projects that are of particular importance to economic development, such as construction of entrepreneur zones and other similar projects, (ii) the realization of projects that are in the general public or social interest, such as the construction of schools, kindergartens, hospitals, health centers, social welfare institutions, sports facilities, (iii) the execution of the obligations of the Republic of Croatia. Real estates can be donated to other natural persons or legal entities as well, if the Croatian Government, on the recommendation of the Commission, by a special decision determines that it is in the interest of the Republic of Croatia, especially if the said donation stimulates the economic progress.

d) establishment of the construction right

The construction right on land owned by the Republic of Croatia is established in order to build facilities for the production of electricity from renewable energy sources. The Agreement of establishment of the construction right will be concluded with the investor that gives the best offer and is elected in the tender published for that purpose by a competent body.

2. The ways of disposing of stocks and shareholdings of companies owned by the Republic of Croatia which are disposed by the Centre are:

a) Sale of stocks in joint stock companies:

  • by public offering - it is conducted as a public call to purchase, addressed to an undetermined or a certain circle of people, according to previously published conditions, in accordance with the provisions of the Capital Market Act
  • by public tender - the sale of stocks of companies in which such stocks represent less than 50% of the share capital, but also the sale of stocks which represent more than 50% of the share capital of companies, if these companies have a share capital less than HRK 750,000.00
  • by public collection of offers - the sale of stocks of companies in which such stocks represent more than 50% of the share capital, or less than 50% in case of companies of special and strategic interest for the Republic of Croatia
  • by sale on the regulated capital market - selling stocks of companies in which such stocks represent less than 50% of the share capital of the company
  • by direct selling - this is organized only in the case if in the procedure of public tender and public collection of offers, the Center does not receive any letter of interest for the three consecutively published public calls for showing interest for the purchase of stocks of a company

b) Sale of shareholdings in limited liability companies:

  • by public tender - the sale of such shareholdings of companies in which shareholdings represent less than 50% or more than 50% of the share capital of the company, if the share capital of the company amounts to HRK 750,000.00
  • by public collection of offers - the sale of shareholdings of companies in which they represent more than 50% of the share capital of the company, where the share capital of such companies exceeds the amount of HRK 750,000.00, or less than 50% in case of the companies of special and strategic interest to the Republic of Croatia
  • by increase of the share capital of the company - on the basis of public call for the share capital increase
  • by direct selling - this is organized only in the case when in the procedure of public tender and public collection of offers, the Center does not receive any letter of interest for the three consecutively published public calls for showing interest for the purchase of shareholdings of a company

The Act defined the overall legal framework for the establishment of the Central Registry of State Assets that includes the widest possible number of types of assets owned by the Republic of Croatia, such as, among others: forests, agricultural land, mineral treasure, roads and highways, railways, the buildings of the Croatian Parliament, the Government, courts, sports facilities owned by the Republic of Croatia etc.

The main goal of this Act is to ensure more efficient and transparent use of state assets, in order to create new value and achieve greater economic benefits. Will this new system of management and disposition of state assets bring the expected results, the time ahead of us will show.

30.12.2013. at 8:30

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