Two state-owned Montenegro bulker owners are facing an uncertain future after the government decided to halt further state aid to help them pay off Chinese loans.

The Agency for Competition Protection's decision impacts Barska Plovidba and Crnogorska Plovidba, finance minister Milojko Spajic said on Twitter.

This follows a similar move in December that stopped aid to Montenegro Airlines, which was then shut down.

The shipowners owe a total of €54m ($65.5m) to the Export-Import Bank of China (China Eximbank).

Barska reportedly took out $46.4m and Crnogorska $57.5m to fund newbuildings in 2010 and 2012.

The loans were guaranteed by Montenegro's previous government.

Government guarantees

Spajic called the decision "one more example of a completed act we were brought to due to the irrational management of the economy and public finances by the previous government".

The government has managed to reach an agreement with the China Eximbank to delay repayment of loans due in January.

The new administration came to power at the beginning of December through a coalition which ousted the ruling Democratic Party of Socialists after three decades.

Barska, also known as Montenegro Lines, has two 35,000-dwt handysizes delivered in 2014 from CSC Jinling Shipyard, while Crnogorska owns two ships of the same size built in 2012 at Shanghai Shipyard.

Spajic said parliament and a local court have been asked to launch a probe into the state support. He added that the cabinet is looking for a sustainable solution regarding the repayment of the amount due to China Eximbank.

The country's capital investments ministry has said the previous government failed to determine whether the guarantees actually constituted state aid.

The ministry said: "Previous governments have repeatedly granted undeclared ... illegal state aid to these shipping companies to justify their unprofitable operations."

Rebuilding an industry

Montenegro's maritime industry was wrecked by sanctions imposed on Yugoslavia in the 1990s.

The two companies, which have been contacted for comment, were seen as the basis for a relaunch attempted nine years ago.

Barska previously operated two ro-ros and two passengerships on routes to Italy, while Crnogorska was formed in 2012 with $20m of investment from domestic and Norwegian banks.