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Seaway Struggling with Liquidity, Puconci Project in Jeopardy

Ljubljana, 21 October (STA) - Boat maker Seaway Yachts, a part of Seaway group, has been struggling with liquidity. Apart from having a blocked account, the company might also be forced to return the EU funds it has received for a R&D centre in the town of Puconci, a EUR 40m project, the daily Dnevnik reports.

Seaway Yachts will have to return the money to the state if it fails to open the facility at the beginning of 2015 at the latest, which was one of the conditions for drawing the EU money.

There has been criticism from the start of the project that its value is overblown. According to Dnevnik, an argument supporting the claim is that Seaway Yachts proposed to the Economy Ministry in May to lower the request for EU funds from EUR 14.5m to EUR 11.33m, even though the funding had already been granted.

Seaway Yachts subsequently received the EUR 11.33m, but the company now reportedly lacks the own funds needed to finish the project.

Unofficially, it owes builder SGP Pomgrad about EUR 1m for the construction of a EUR 6m production plant. The plant is now finished, but the launch of three other projects within the centre is questionable.

Of the EUR 14.5m subsidy originally requested, the company committed to allocate EUR 4.98m for research projects and EUR 9.55m for development.

Both Seaway Yachts and its associate Seaway Design now have their accounts blocked by Kranj-based company Sistem VVE, which has prepared the documents for the drawing of EU funds.

Seaway is also struggling with its regular operations, according to unofficial information. Despite sufficient orders, it reportedly lacks funds for the materials. Many of its workers have reportedly been place on forced leave.

This would not be the first time that Seaway, whose operations and development are mainly based on successful drawing of EU money, would have to return EU funds. In 2012, Seaway Design had to return almost EUR 216,000 over irregularities, the Economy Ministry told Dnevnik.

Senior officials from the company were also reported to the police and criminal charges were filed against them in mid-2012 on suspicion of defrauding the EU of some EUR 471,000.

Apart from the economic crisis, which hit the nautical industry hard, the problems of the group are also being attributed to a dispute between the owners, the Jakopin brothers and the KD Group, one of the biggest asset management firms in Slovenia.

KD Group is currently selling its 47.5% stake in Seaway Design.

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