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Cyprus court bans transactions with property of Montenegro's KAP - CEAC

Cyprus court bans transactions with property of Montenegro's KAP - CEAC

PODGORICA (Montenegro), July 7 (SeeNews) – A Cyprus court has ordered an injunction on operations involving the assets of Montenegrin aluminum smelter KAP in connection with a 44 million euro ($60 million) claim filed by En+ Group, parent of the Central European Aluminum Company (CEAC), CEAC said on Monday.

CEAC, established in 2005 to manage the aluminium business interests of the En+ Group in Central and Eastern Europe, and the Montenegrin government each owned 29.3% of KAP prior to the sale of the company.

KAP was declared bankrupt in October.

The injunction covers all transactions involving KAP assets, including the recently announced sale by the government of Montenegro of the smelter to Uniprom for 28 million euro, CEAC said in the statement.

Other transactions that have been blocked include the alienation of property, the disbursement of monies from KAP’s accounts, and the sale of any aluminium produced at the plant, it said.

The ban remains effective until the court passes final judgment on En+ Group’s claim.

“Pursuant to the existing international agreements, the judgment by the Nicosia District Court will be mandatory for Montenegro, as well as other countries where the KAP’s contractors are incorporated,” the statement said.

“We welcome the Nicosia District Court’s ruling, which clearly demonstrates that Montenegrin authorities’ sale of KAP assets violates both Montenegrin and international laws, " CEAC’s general counsel, Pavel Priymakov, said

"The bankruptcy proceedings have been littered with other such violations: from the manager’s failure to make a financial analysis of the asset divestment options, to his single-mindedness to offer KAP for sale to just one buyer and his routinely ignoring the opinions of all creditors other than the government of Montenegro," he added.

CEAC has launched two arbitration procedures against the government of Montenegro for breach of the KAP settlement agreement of 2009, and the foreign investments protection agreement between Cyprus and Montenegro. The claims total more than 700 million euro, including the damages incurred as a result of the actions of the Montenegrin government and for violation of investor partnership agreements.

($=0.7359 euro)