The government gave consent to the company Luštica Development, which builds and develops the tourist town of Luštica Bay, to conclude a credit arrangement for which the first luxury hotel in the resort, The Chedi Luštica Bay, will be pledged as a means of security.
It is a loan of EUR 8.3 million from Alta banka from Belgrade, writes Vijesti.
The State of Montenegro is one of the founders of the company Luštica Development, in which it has a 7.19% stake.
A positive opinion was previously given by the protector of property and legal interests of Montenegro, because it was stated that the request was submitted in accordance with what Luštica Develompent is allowed by the lease and construction contract that the company concluded with the state of Montenegro in 2009.
In the request of the Tivat company, backed by the Swiss-Egyptian consortium Orascom, which was sent to the Government in mid-September, it is written that Luštica Development has so far invested EUR 350 million in the construction of the Luštica Bay complex and that after the summer tourist season, intensive construction work on facilities in the Marina and Centrale settlements, as well as at the completion of the first phase of the golf course.
It is stated that the company Luštica Development, in order to finance these works, provides the necessary funds through various sources of financing, including its own capital, shareholder support loans from the company Orascom Development Holding as its majority shareholder, as well as loans taken from commercial banks.
Therefore, on September 13, Luštica Development concluded a new loan agreement with Alta Bank from Belgrade, which grants the Tivat company a medium-term loan for financing working capital intended for the Luštica Bay project, in the amount of EUR 8.3 million, with a maturity of three years and grace for a period of 12 months.
In order for the loan to be operational, the bank needs to establish a lien as a means of securing its return, over part of Luštice Development’s property, which, according to the company’s contract with the state from 2009, the Government needs to give formal consent.
Strict Luštica Development turned to the executive authority with a request for a “green light” to register an enforceable out-of-court mortgage in favor of Alta banka over the facilities of the first hotel that was built in this complex.
According to this arrangement, the Belgrade bank will put a mortgage on both wings of this hotel, which consists of 46 tourism business spaces (apartments), 12 technical rooms, eight units of non-residential space and 31 garage spaces, with a total area of 6.37 thousand square meters.
At the same time, the government also issued the company’s creditor with a certificate that the state “is in good relations with regard to the rights and obligations of the contracting parties” from the lease and construction contract from 2009, as well as that the government and Luštica Development do not have any disputes regarding the implementation of that contract.
The granting of the state’s consent for Luštica Development to mortgage part of its property, as stated in the material adopted by the Government at the previous week’s session, does not release that company from fulfilling any of its obligations from the contract by which the company was given a long-term lease in 2009 for almost seven million square meters of state land in Luštica, for the purpose of building a new tourist town Luštica Bay worth EUR 1.1 billion, local media writes.