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BANJA LUKA (Bosnia and Herzegovina), July 12 (SeeNews) – Bosnia's Serb Republic government has cancelled its contract with Swiss-based Batagon International for the acquisition of bankrupt alumina plant Birac, local media reported on Friday.
Batagon neither fulfilled its obligations under the contract, nor showed it has serious intentions to do so, the Republic's deputy prime minister Anton Kasipovic said, as quoted by public broadcaster RTRS.
In particular, despite the agreement to take over Birac's debt towards the Republic's institutions, Batagon asked the government for permission to repay only part of the debt within the agreed deadline and service the remainder gradually in the future.
In December, the Serb Republic government said that Batagon International, UK-based Metal Investments Limited, as well as Bosnian companies MG MIND and Pavgord submitted bids for the acquisition of Birac. It subsequently selected Batagon as a tender winner.
Under the tender conditions, the investor was required to invest at least 50 million euro ($56 million) in the development of the company over five years, to keep the current 1,500 employees and fulfil the obligations of Birac under an ore supply contract signed with Bosnian company Boksit.
RTRS reported in a separate statement on Friday that following the withdrawal of Batagon, Boksit has expressed interest to take over Birac's 43 million marka ($25 million/22 million euro) outstanding debt towards the Republic's institutions.
Boksit representatives have sent a letter of intent to the Republic's government, saying they are ready together with business partners to repay the debt and to invest 100 million marka in the development of new products and infrastructure at Birac.
Birac entered bankruptcy in 2013 and was raided by police and tax inspectors over suspected illegal dealings in several transactions. Prior to the Birac bankruptcy, Lithuania's Ukio Bank, which itself went bankrupt in 2013, owned 56.8% of the alumina producer following a 2001 privatisation deal.
(1 euro = 1.95583 marka)