July 5 (SeeNews) - The government of Bosnia's Federation said it has held talks with representatives of Emirates Global Aluminium (EGA) who have declared their interest in drawing a plan for the recovery of ailing aluminium producer Aluminij.
EGA's representatives have proposed to first carry out a financial and technical analysis of Aluminij's operations, and then draw a five-year plan that should result in the recovery of the Bosnian company, the Federation government said in a press release on Thursday after the meeting.
You can subscribe to our M&A newsletter here
EGA has also pledged to double Aluminij's output.
Last week, the Federation government held talks with British-Swiss company Glencore on the fate of Aluminij.
Federation's energy minister Nermin Dzindic noted that the meetings with the two interested investors were successful, estimating EGA's proposal as more precise, the entity's government said. He added that in the meantime Glencore has sent a request to the Federation government to continue with the negotiations.
Dzindic also said that an earlier auditor's report suggested two possible options for Aluminij: to find a strategic partner, or launch bankruptcy proceedings.
Bosnian news outlet Klix.ba reported on Thursday that Glencore has provided Aluminij with financing for the purchase of electricity and raw materials for four more days. Klix.ba quoted Aluminij as saying in a statement that Glencore's move is a final attempt to give more time to the struggling Bosnian company and find a solution to its lasting problems.
Thus, a shutdown of Aluminij, expected to begin after midnight on Friday, will be delayed by four days to await the results of the new talks between Glencore and the Federation government scheduled for Monday.
"Unfortunately, judging by their rather different views, we are not optimists and we do not hope for good news," Alumnij said in its statement, according to Klix.ba.
To date, Aluminij's unpaid bills to power utility Elektroprivreda HZHB have reached some 280 million marka ($161 million/143 million euro), according to earlier media reports, which is why the power utility is cutting its supplies to the troubled aluminium smelter.
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, reiterated its position earlier this week that it is no longer able of subsidising Aluminij's electricity costs as the price for the taxpayer is too high.
The Federation government controls 44% of Mostar-based 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)