PODGORICA (Montenegro), October 26 (SeeNews) – Montenegro would take over half of the majority stake held by Russia’s CEAC in aluminium smelter KAP under a deal finalised on Tuesday, the government in Podgorica said on its website.
As a result of the deal, Montenegro's government and CEAC will own 29.365% of KAP each, local TV and radio broadcaster RTCG (www.rtcg.me) reported.
You can subscribe to our M&A newsletter here
The transfer of the stake is part of a bigger deal signed in November 2009, under which the Montenegrin government agreed to issue by the end of 2009 sovereign guarantees worth 135 million euro ($187 million) for the restructuring of KAP’s existing debt and for the company's planned modernisation.
KAP has in the meantime signed government-guaranteed loans with major international lenders like Hungary’s OTP and Deutsche Bank to restructure and refinance its debt.
Under the deal wrapped up on Tuesday Montenegro's government will have a representative on KAP’s management board who will have a veto right, RTCG said.
The government has also agreed to subsidise KAP’s electricity purchases by 15 million euro a year.
CEAC and the Montenegrin government started the negotiations on the bailout plan for KAP in October 2008 after the company revenues were severely hit by a sharp drop in aluminium prices on global markets. Since then KAP has cut the number of employees to 1,100, which together with the current aluminum market price of $2,300 per tonne provides for a realistic expectation that the company could become profitable, RTCG said.
En+ Group, the energy division of Russian tycoon Oleg Deripaska's Basic Element group, bought 65.4% of KAP in 2005.
($=0.7205 euro)