Montenegrin Government Approves Capital Increase for Institute

The Montenegrin Government approved a plan for the capital increase of the Institute “Simo Milošević” during a telephone session on October 6, 2023. This decision follows the earlier adoption of a restructuring plan in May, which aims to address outstanding liabilities of €21.44 million through funds generated from the capital increase.

The capital injection will occur in two phases, contingent upon the decisions made by the shareholders’ assembly. It will be open to all shareholders, ensuring broad participation in the process. Notably, representatives from the Hotel and Tourism Company (HTP) Vile Oliva have committed to contribute €7 million to the capital increase. The government is responsible for covering the remaining balance necessary to meet the €21.44 million target.

Details of the Restructuring Plan

In late October, the shareholders’ assembly of the Institute decided to issue ordinary shares to secure the funds specified in the restructuring plan. The prospectus for the public offering of the third series of ordinary shares, Series A, was published at the end of last year. This offering includes 152,000 shares, collectively valued at €23.56 million.

After the deadline for existing shareholders to exercise their pre-emptive rights, any remaining shares will be publicly offered through a selected investment company on the Montenegro Stock Exchange. The government plans to exercise its pre-emptive rights proportionally to its ownership stake in the Institute. To facilitate this, it will deposit €4.6 million into a designated account for the Institute.

The capital increase is seen as a vital step in ensuring the financial stability of the Institute “Simo Milošević,” which plays a significant role in the health and wellness sector in Montenegro. By addressing its financial obligations, the institute aims to enhance its operational capabilities and better serve its clients.

This strategic move reflects the government’s commitment to supporting key institutions in the country, particularly in the healthcare sector, which is crucial for both local residents and tourists seeking wellness treatments. As the restructuring progresses, stakeholders will be closely watching the developments to ensure the successful implementation of the plans.