Montenegrin Government Says to Take Over KAP, Local Media Report

Montenegrin government said it would take steps to gain full control over the indebted aluminum plant KAP. Currently, Montenegro and the Russian energy conglomerate EN+ Group share a controlling stake.

According to local media, Montenegrin government decided to start this procedure last week, when it was forced to assume a big debt (nearly 132,000,000 €) that KAP owed to foreign creditors.

Since it is the only aluminum plant in the country, Kombinat Aluminijuma Podgorica is an important factor for the economy. KAP has been losing money since 2009, when metal prices fell.

According to Milorad Katnic, Finance Minister, the Government is now trying to gain more control over the situation in KAP and define policies and procedures related to aluminum production.

Mr. Katnic didn’t say if the takeover meant an immediate breach of the EN+ contract. The EN+ Group owns 29.7 % (the company gave the Montenegrin government ½ of its 58% stake in the plant in 2010). The remaining stake is owned by several small shareholders.

Vladimir Kavaric, Economy Minister, said that Montenegrin government would offer 1 € to the EN+ Group for its stake, according to yesterday’s local media reports.

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