April 7 (SeeNews) - The shareholders of Bosnia's Aluminij approved a revised offer by Israel's M.T. Abraham Group and its Chinese partners for a long-term lease of the production assets of the ailing aluminum producer, local media reported.
The offer was put to the vote at an extraordinary shareholders meeting held on April 6 and was supported by the government of Bosnia's Federation - Aluminij's single largest shareholder, state radio and TV broadcaster BHRT reported on Monday. Only the representative of the small shareholders voted against the leasehold proposal, the report said.
You can subscribe to our M&A newsletter here
In particular, the shareholders adopted a decision on Aluminij signing a business cooperation agreement with Mostar-based firm Aluminij Industries d.o.o. - a Bosnian company recently established by M.T. Abraham Group and its Chinese partners which is expected to take Aluminij's assets under lease.
The restart of production at Aluminij is planned to take place in several stages, with the foundry plant going online first and employing some 200 workers, with 80 of them being engaged in the initial stage, BHRT said.
Later on, production will be restarted at Aluminij's anode and electrolysis plants.
Last month, local media quoted the Federation's finance minister, Jelka Milicevic, as saying that the entity's government was happy with the latest proposal of the Israeli-Chinese consortium since it has complied with all of its previous remarks and recommendations, including providing of guarantees that the leaseholder will continue production at Aluminij, hire the employees and regularly pay their wages.
In February, the majority of Aluminij's shareholders including the Federation government voted against the long-term lease proposal submitted by M.T. Abraham and its Chinese partners - China Machinery Engineering Corporation (CMEC) and China Nonferrous Metal Industry’s Foreign Engineering & Construction (NFC), saying the document contains legal and technical errors.
Back then, the Federation gave 30 days to the management and supervisory boards of Aluminij and to all participants in the process to correct the errors in their proposal.
The Federation government controls 44% of Aluminij, followed by the government of neighbouring Croatia with 12%, with the remainder owned by smaller shareholders. The Federation is one of two autonomous entities forming Bosnia and Herzegovina. The other one is the Serb Republic.
Aluminij shut down operations in July 2019 after its power supply was cut off due to swelling unpaid bills. Following the shutdown, the Federation government decided that Aluminij should continue to operate and come up with a rescue plan by the end of 2019.
M.T. Abraham said in December that its primary objective is to reactivate and stabilise the existing smelter operations, introduce new operational efficiencies, open a new modern production line and enhance management practices in order to ensure long-term stability and profitability.