The Montenegrin government has withdrawn its approval for a proposed €15 million loan between property developer Luštica Development and Belgrade-based Alta Bank. The financing would have been secured by the company’s right to use a marina and waterfront promenade at the Luštica Bay resort near Tivat.
Under the proposed five-year agreement, the loan would carry an initial fixed interest rate of 8.5%, falling to 7.5% once the collateral had been registered. The company would also receive a 12-month grace period. The funds were intended to finance permanent working capital.
The government initially approved the registration of the pledge on June 29. However, at a telephone session on July 28, it revoked that decision and instructed the Ministry of Spatial Planning, Urbanism and State Property to have the security interest removed from public records.
No detailed explanation was provided. The government said only that new legal and factual circumstances had eliminated the basis for maintaining the pledge.
The proposed collateral covered Luštica Development’s usage rights over the marina and waterfront promenade on a state-owned site in Radovići, Tivat. Had the company failed to repay the loan, Alta Bank could potentially have acquired the right to use the property.
The new borrowing now appears either to have been abandoned or to be proceeding without the proposed marina collateral. Luštica Development reportedly said it currently had no loan arrangements with Alta Bank.
However, the company’s 2025 financial statements show that it had previously borrowed €10.65 million from the Serbian lender through three long-term loans worth €4.15 million, €3.5 million and €3 million. The same accounts list total long-term borrowing of approximately €47.72 million, of which €26.19 million was due within the current period.
Luštica Development’s largest lender at the end of 2025 was Crnogorska Komercijalna Banka, to which it owed about €24.31 million. Its long-term loans carried an average interest rate of 6.23% and were secured through mortgages and promissory notes.
The company also signed a separate €35 million investment loan with Serbia’s AIK Bank in December 2025. It drew the money in two tranches—€20 million and €15 million—in January 2026. Security for that financing included mortgages, rights over construction plots, receivables, shares held by Orascom Development Holding and a corporate guarantee from the Swiss-Egyptian group.
At the end of 2025, Luštica Development also had €11.35 million in short-term loans from Montenegrin banks. Its business liabilities stood at €47.68 million, while advance payments received from buyers for apartments, leases and parking spaces totalled €32.51 million. The company reported an after-tax profit of €574,487 for the year.
Luštica Development is majority-owned by Orascom Development, while the Montenegrin government holds a stake of just under 10%.
