Montenegro’s Parliament urged the government to repossess aluminum producer Kombinat Aluminijuma Podgorica AD from Oleg Deripaska’s En+ Group, a move the Russian billionaire vowed to contest in courts.
Prime Minister Igor Luksic won lawmakers’ support to service a 22 million-euro ($29.3 million) loan that unprofitable KAP took from Deutsche Bank AG in 2009 with government guarantees, in order to preempt a default on state-backed loans that total 132 million euros, Parliament announced after a vote last night. En+ reiterated its offer that all KAP loans be converted into equity, and threatened legal action against any unilateral attempt to wrest away its 29.3 percent stake.
En+ would “turn to international courts with lawsuits against the government” in case of any “illegal attempts to eliminate us from the shareholding structure in KAP,” board Chairman Alexey Kuznetsov said in e-mailed comments.
The parliament backed the government’s plan to find an “efficient way to end cooperation with CEAC,” the En+ Group subsidiary that manages KAP, as it seeks ways to maintain the operation that last year produced 92,800 metric tons of primary aluminum, according to the motion approved by parliament. KAP is the biggest industrial plant in the nation.
En+ Group Ltd. asked Montenegro on Feb. 17 to convert the debt, including 86 million euros to En+. Deputy Premier Vujica Lazovic said at the time the state would prefer to regain control of KAP rather than continue providing it with subsidized electricity, the biggest single production cost.
Deripaska acquired a majority stake in KAP in 2005 for 48.5 million euros and later accused Montenegro of misrepresenting the value of the asset. Under a settlement in 2010, EN+ gave Montenegro half of its 58.6 percent stake in exchange for government loan guarantees.