Taking into account the obligations of the hotel group of €18 million and court cases worth €3.8 million, the total budget of Budva Riviera last year was 187.5 million. This is stated, as "Vijesti" unofficially found out, from several sources in the Elaborate on the estimated market value of the Budva Riviera property, which will be found on the agenda at the ninth session of the shareholders' meeting.
Last year, the Privatization Council agreed to conduct a new Budva Riviera capital estimate, after which various restructuring models will be developed, including the separation of a state-owned company for the complex St. Stefan and Miločer. If this scenario happened, the current minority shareholders could become majority owners of the remaining part of the company. This company is included in this year's government privatization plan. The majority owner of Budva Riviera is now the State (the Government, the PIO Fund and the Employment Office have about 58 percent of the shares).
About 15.23 percent of the shares belong to AIK bank from Belgrade, by the Serbian businessman Miodrag Kostić, and the same is owned by the two companies Strateks group, a total of 15.2 percent by the American businessman Nil Emilfarb. For as much as the estimated value of the St. Stefan complex and Miločer would be, the same amount it will be reduced by the Government's participation in the remaining part of Budva Riviera, which will be the tourist resort of Slovenska beach, hotels Mogren and Aleksandar in Budva, as well as the hotels Palas, Castellastva and Cristal in Petrovac. Therefore, the participation of the current small shareholders will increase who can become a majority.
The Montenegro stock exchange in April 2016 enrolled 1.2 million Budva Riviera shares, which AIK Bank bought from Strateks for six million euros. Immediately after the acquisition, Strateks and Kostic announced a strategic partnership in the Budva Riviera, and said they "share the vision of the development of this hotel group and believe in its positioning as the leader in the area of hotel tourism in the region.
"They now each have one member in the Board of Directors of the Budva Riviera. Budva Riviera, with about 3,800 beds, is the largest tourist company in Montenegro. With its long and rich tradition of providing catering services, it has a recognizable image on the tourist market in Europe. Budva Riviera runs and operates five hotels - Palas in Petrovac (four stars and 171 accommodation units), tourist resort Slovenska beach in Budva (three plus four stars with 1,016 accommodation units), Hotel Aleksandar in Budva (four stars, 187 accommodation units), hotel Castellastva Petrovac (four stars, 185 accommodation units) and hotel Mogren in Budva (three plus stars, 49 accommodation units). The hotel group also includes the hotels St. Stefan and the "Miločer" villa in Miločer, which, since January 2007, is under the multi-decade lease of the company "Adriatic Properties" by the Greek businessman Petros Statis and under the management of the worldwide hotel brand "Aman Resorts".
21 million euros was Budva Riviera’s revenue last year, which was a record in profit and 11 percent more than in 2016. The average salaries of employees in the company are 722 euros and are well above average earnings in the hotel industry. The 2014 estimate did not show the real value for the announced privatization
Minister of Tourism Pavle Radulović explained in a letter to the independent delegate Aleksandar Damjanovic last October that the Director board of Budva Riviera in 2015 decided to create a restructuring plan that elaborated two options and models of division of shares to existing shareholders, therefore this document is based on to the just adopted Elaborate on reassessment of the capital.
The Minister explained that the Elaborat on the reassessment was done in 2014 by the Faculty of Economics, with the intention of presenting the current fair value of the capital, since the previous estimate was made in 2004, and in the meantime, considerable money was allocated for the adaptation of the facilities and raising of the offer’s quality level.
"After the adoption of this study, in 2015, Budva Riviera took over the adaptation of the first phase of the hotel Aleksandar (82 accommodation units) and during 2016 and 2017, the second phase of the adaptation of 110 accommodation units, the new stock exchange block and accompanying facilities."
Additionally, constant investments were made on the investment plan in other facilities, as well as significant investments in hotel St. Stefan by the company's leasing company Petros Statis.
"The estimation adopted in the previous period by the mentioned methodology does not provide Budva Riviera any potential which are relevant from the point of view of future segmentation and privatization. Therefore, there is a need for a new capital estimate with a specific purpose and different methodology," Radulovic said in response to the question by Damjanovic.
Text by Marija Mirjacic and Vuk Lajovic, on July 25th 2018, read more at Vijesti
