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“When I see the shutters and closed doors in St. Stephen, I am overwhelmed with sadness, because fifty years ago, that city-hotel was winning world awards, but now it does not work,” said Vladimir Mitrovic, 87, a local.
Half a century ago, at the time of St. Stephen’s world fame, he was its director. The fact that the most famous Montenegrin tourism brand is closed for the second season, he considers detrimental to the country’s tourist reputation.
“When I walk to St. Stephen, through the park of Milocher, I see that it has been neglected, it is traded on the beaches, there are no services and beach guards, it happens that kebabs are baked there. “A very harmful message is being sent to Montenegrin tourism,” Mitrovic told Radio Free Europe.
How did you get to this point?
The exclusive St. Stephen and Milocer hotels, then the Queen Beach, where a new facility worth about 70 million euros is being built, have been rented for a long time since 2007, first by Aman Resorts of Singapore and then by the businessman of the Greek company Adriatic Properties, Petros Statis.
The hotels at the time were part of the Budva Riviera hotel company, mostly state-owned, and the contract was signed when the Democratic Party of Socialists (DPS) was in power.
Aman Resorts did not open hotels last summer either. This was preceded by protests by some locals and local government leaders from the Democratic Front, Democrats and the civic movement URA.
They opposed the construction of real estate within the new Queen Beach hotel and demanded unconditional access to the beaches of rental hotels. They entered the construction site and tore down the beach fence.
“Urgently a solution must be found for the opening of the hotel and the solution must be found by those who are most responsible,” says Mitrovic.
Prime Minister Abazovi për for St. Stephen
For now, however, there are no reports from the Montenegrin government that the opening of the hotel is on the horizon, although Prime Minister Dritan Abazovic says the worst option is for St. Stephen to remain closed.
“I have started the issue, so that in some modalities St. Stephen can be returned to state ownership 100 percent and that through the decision of the Government, perhaps the Parliament, be declared as a special good that is not alienated, this is the idea of “The government,” Abazovic told reporters on June 10.
Radio Free Europe asked Abazovietin’s cabinet and the Government what modalities were in question, what steps should be taken for this purpose, in which instances and within what deadline, but the answer was missing.
What can the court do?
Meanwhile, famous hotels have become the subject of lawsuits by landlords and tenants.
The company Adriatic Properties sued the relevant Ministry, the hotel group (HG) “Budva Riviera” and the joint stock company (AD) “Hotels St. Stephen”, in an arbitration court in London.
The company “Hotels of St. Stephen” is the owner of rented hotels, which was created with the separation from HG “Budva Riviera”, in 2019. The main owner of both companies is the state of Montenegro.
Among the questions Radio Free Europe has asked Adriatic Properties are: how much do they value the compensation they claim in their lawsuit, as well as when they plan to open the hotel.
“The rules of the London Arbitration process require that all parties to the proceedings maintain confidentiality, so lawyers advised us not to answer questions or comment that could violate the arbitration rules,” the Adriatic Properties said in a statement.
The Minister of Economic Development and Tourism, Goran Djurovic, told the media in Montenegro that he hopes to succeed in the next period to get out of the ‘legal nonsense’ and maybe find a model to open St. Stephen.
Answering the direct question whether he is in contact with the tenants, ie whether this tourist season has been lost, given that it is already the end of June, Minister ururovi tha said:
“When you are in the process of arbitration, then it is very difficult to negotiate.”
Recall that the President of Montenegro, Milo Djukanovic, in April 2021, stated that “arbitration could mean at least 100 million euros in damage to the budget of Montenegro.”
However, the defendant has also become a plaintiff: the company “Hotelet Shën Stefani” has sued the tenant in the same arbitration court “to protect its rights from the contract, but also the share capital and property of the company”.
“I can only say that the closure of the hotel and the circulation is causing us harm, as it is indirectly causing harm to this whole branch of the economy, industry and the state, due to the lack of guests and the lack of jobs,” he told Radio Europe. Free, the executive director of AD “Hotels St. Stephen”, Nikola Plamenac.
Serbian businessman interested in buying hotels
While the arbitration is going on, while tourists are still waiting for the opening of closed hotels, an offer arrives for their purchase.
The company MKG Properties, a member of the MK Group owned by the Serbian businessman Miodrag Kostic, on June 14 published the offer for the remaining shares of the companies “Riviera e Budvës” and “Hotelet Shën Stefani”, this company confirmed for Radio Free Europe .
Earlier, on May 24, MKG Properties bought additional shares on the stock exchange, so now it has 32.20 percent of the shares in “Budva Riviera” and 31.25 percent in “St. Stephen Hotels”.
After exceeding the ownership threshold of 30 percent in these companies, the company has a legal obligation to offer other shareholders a purchase with the same conditions, ie 7.3 euros per share for “Budva Riviera” and 3.85 euros per share for Hotels “St. Stephen”, it is said in the letter.
The purchase of the majority of the share packages would be worth 61.5m euros.
The government has not yet made any decision on the offer of businessman Miodrag Kostic, because an in-depth analysis should be done first and all relevant factors should be consulted, said the Minister of Economic Development and Tourism, Goran Djurovic.
He stressed that in the next twenty days the Government will not come up with a position on the possible sale of shares.
Opposition Democrats reacted by saying that there was no price that measured the value of the national treasury and that the offer “should be rejected immediately and decisively”.
Minister ururovi menjëherë immediately responded that St. Stephen remains a protected national asset of Montenegro “and that it will not be sold for 600 million euros”, and that MK Group had a legal obligation to make an offer for other shares, after acquiring more than 30% of ownership.
“It does not oblige anyone to sell them. Prime Minister Dritan Abazovic has repeatedly stressed that St. Stephen will remain a Montenegrin-owned jewel. “No one can change that,” Djurovic wrote on Twitter on June 16.
The MKG Properties offer is valid until July 5th.
What is the current situation on exclusive beaches?
The beaches that gravitate to exclusive hotels are the two beaches of St. Stephen and the two beaches of Milocher.
For decades, they were intended primarily for hotel guests who paid the most expensive price on the Riviera overnight, but also for others who could afford a hundred euros a day for beach services.
Currently, access to the beaches is free, but they are unregulated, with no beach services and no hotel offers.
“We will not allow last season to be repeated. “If the Adriatic Properties properties do not regulate the beaches again, we will do it so that locals and tourists can use them,” Blazho Ragjenovi nga from “The Goods of the Sea” (Morska) told Radio Free Europe. dobra), the company that manages the coast.
He adds that Adriatic Properties paid the rent last year, which was about 75 thousand euros for four beaches, without VAT. REL
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