SARAJEVO (Bosnia and Herzegovina), March 24 (SeeNews) - Bosnia's Aluminij said its shareholders will meet on April 4 to vote on the amended offer of Israel's M.T. Abraham Group and its Chinese partners for a long-term lease of the production assets of the ailing aluminum producer.
In particular, the shareholders will vote on a proposal to adopt a decision on Aluminij signing a business cooperation agreement with Mostar-based firm Aluminij Industries d.o.o., Aluminij said in a filing with the Sarajevo bourse on Monday, without providing further details.
Aluminij Industries is a newly established company of M.T. Abraham Group and its Chinese partners in Bosnia, which is expected to take Aluminij's assets under lease.
Local news outlet reported on Monday that Bosnia's Federation government, in its role of Aluminij's largest single shareholder, has already given the green light to the signing of the leasehold contract.
Indikator.ba quoted the Federation's finance minister, Jelka Milicevic, as saying that the entity's government is 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.
The report also recalls that it its initial proposal the investor had offered to pay an annual lease of 30,000 marka ($16,660/15,340 euro), but it was turned down by the shareholders as unfavourable.
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.
Following the February vote, M.T. Abraham's management and its team of legal advisors arrived in Mostar, where Aluminij is based, to discuss again the Federation government's comments on 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.
Earlier in March, local media reported that a consortium led by Switzerland's Glencore and Spain's Acciona was said to be interested in restarting production at Aluminij, emerging as the second potential candidate currently interested in the Bosnian company.
According to the media reports, the Glencore-Acciona consortium has not submitted an offer yet but its representatives have presented their plans to the management and shareholders of Aluminij, pledging to restart production at Aluminij by the end of the year without state support and without state subsidies for the electricity price.
Aluminij shut down operations in July 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.
(1 euro = 1.95583 marka)