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SARAJEVO (Bosnia and Herzegovina), July 11 (SeeNews) - Bosnia's Federation government is continuing to look for strategic partners of ailing aluminium producer Aluminij, which shut down its operations earlier this week due a halt in electricity supplies, the entity's energy minister said.
"We do not believe this decision for shutting down the operations or eventually for launching bankruptcy proceedings would change the mind of potential investors since they are already well aware of the situation," Nermin Dzindic, said in a Federation government press release.
He made the comments during a news conference in Sarajevo on Wednesday following the news of Aluminij's shutdown. The indebted aluminium producer had its power supply cut at midnight on Tuesday to Wednesday due to unpaid electricity bills.
Dzindic also said that Aluminij's current debt of 400 million marka ($231 million/ 205 million euro) is a result of systemic and planned work of the company's previous management teams against the interests of Aluminij and its workers.
"Somebody should take a responsibility for this," he said. "For Aluminij we should find a model of self-sustainability."
Dzindic also said that Aluminij's director Drazen Pandza was expected to file for bankruptcy already on Wednesday.
On Monday, the Federation said its talks with British-Swiss company Glencore on saving Aluminij failed after the potential investor changed its mind regarding the initial proposal to take over Aluminij if the Federation government committed to a fixed electricity price of 50 euro per megawatt hour for the cash-strapped company by the end of the year.
After changing their original proposal, Glencore withdrew from the talks, local media quoted Dzindic as saying on Monday. But he added that the government will continue the negotiations with the remaining interested investors, including Emirates Global Aluminium (EGA) who declared last week their interest in drawing a plan for the recovery of Aluminij.
The Federation government, Aluminij's largest shareholder, has been under pressure by potential investors and the company's management to subsidise the electricity price for the aluminium smelter. The government, however, has stressed it is no longer able of subsidising Aluminij's electricity costs as the price for the taxpayer is too high.
Aluminij has been one of the largest electricity consumers in Bosnia, accounting for a quarter of the electricity consumption in the Federation when operating at full capacity. The company has been in persistent trouble over high prices of electricity and raw materials. Its outstanding debt to power utility Elektroprivreda HZHB reached 280 million marka.
Aluminij employs 900 people and has numerous suppliers and other cooperating units, including Croatia's Adriatic port of Ploce, with the Mostar-based company engaging 20% of the port's capacities.
The Federation government controls 44% of Aluminij, followed by the government of Croatia with 12%, with the remainder held by smaller shareholders.
The Federation is one of two autonomous entities forming Bosnia and Herzegovina. The other one is the Serb Republic.
(1 euro = 1.95583 marka)