The Dutch Damen group sued Romania at an international arbitration court, demanding the termination of the association agreement concluded in 2018.
Through that agreement, the Romanian state became the majority shareholder (51%) of the company Damen Shipyards Mangalia SA, which operates the homonymous shipyard on the Black Sea coast, and Damen remained with 49% of the capital and took over the operational management control of the company, writes Profit.ro.
The Dutch also asked for compensation, data analyzed by Profit.ro reveals. “Damen Group has no information to communicate at this time,” the Dutch company said.
Damen previously asked for compensation of half a billion euros, as reported by Profit.ro.
The defendant is the Romanian state company Șantierul Naval 2 Mai SA, controlled by the Ministry of Economy, which owns 51% of Damen Shipyards Mangalia.
The employees of the Damen shipyard in Mangalia sent an open letter to the Government last month, in which they sounded the alarm that, in the absence of concrete measures, there is an “imminent” risk of temporary interruption of activity for most of them.
They said the yard was facing a sharp decline in workload, adding that negative financial results and “huge” debts to creditors, mainly the Damen group, magnified the risk of insolvency.
″In the event of the materialization of the risk related to the loss of the litigation (arbitrary, filed by the Dutch – no), it could lead to significant cash outflows and would affect the principle of business continuity. The company (Şantierul Naval 2 Mai SA – no) did not ensure compliance with the principle of prudence provided by OMFP no. 1802/2014, by the fact that he did not carry out an impact analysis and did not record a provision for the said litigation in the accounting records”, it is stated in an official document.
According to the cited source, the charter of the joint venture company Damen Shipyards Mangalia stipulates that the foreign shareholder, Damen Holding BV, ″undertakes to exercise its managerial and operational control in such a way as to cause the company to achieve operational profit in the shortest possible time, but no later from the end of the financial year 2024″, and “the Romanian shareholder will support, within the limits of his capacity as a shareholder (without managerial and operational duties) the efforts of the foreign shareholder in this regard”.
In the document it is also noted that, currently, the value of the majority holding of the 2 Mai Shipyard in Damen Shipyards Mangalia SA is entered in the accounting at the amount of 15.6 million lei, but given that the joint venture has registered negative equity that does not can be covered from future profits within a ″reasonable″ time frame, the Romanian state-owned company will have to reassess its holding and recognize an impairment adjustment during this year.
Damen issued a notice of termination of the 2018 agreement to Şantierul Naval 2 Mai SA, as early as last August, demanding compensation of half a billion euros, as Profit.ro exclusively reported. The association agreement provides for compensation if the agreement ends due to the fault of one of the parties.
The reason for termination cited last August by the Dutch was that, through a law passed by Parliament at the end of June 2023, the companies in the special situation of Damen Shipyards Mangalia, with a majority state shareholder, but with private operational control, they are no longer exempt from local legislation on the corporate governance of public enterprises.
The exception, introduced in 2018 precisely to make possible the arrangement with Damen from Mangalia, stipulates that the corporate governance legislation of state companies does not apply to those companies where ″(…) the private shareholder no longer holds the majority stake and has the financial capacity and technique necessary for the development of the operator’s object of activity, in which case he can be entrusted with the executive management of the company, its managerial and/or operational control, under conditions of economic efficiency, with the assurance of know-how, of the client portfolio and of workforce”.
