Bosnia region to sell 44% stake in Aluminij smelter

Bosnia's regional government will soon offer for sale its 44 percent stake in the country's sole aluminium smelter Aluminij Mostar to help cover a budget deficit, the Prime Minister said on Thursday.

The sale of Aluminij, one of Bosnia's top exporters, is part of the government's plan, endorsed last week, to sell its minority stakes in eight companies.

"The sooner, the better," Prime Minister Fadil Novalic said on Thursday when asked about the timing of the sale of Aluminij Mostar, adding: "We need money."

He said the privatisation agency would prepare a sell-off plan, but declined to be more specific about the timing of a sale.

The Bosniak-Croat Federation is struggling with a widening budget deficit which has exceeded 800 million Bosnian marka ($466 million). It hopes a possible new loan deal with the International Monetary Fund (IMF) will help plug the budget.

Aluminij, which is among Bosnia's top exporters, has slightly recovered this year after narrowly avoiding closure several times in recent years over its growing debt which has reached about 100 million euros ($114.01 million).

Small shareholders own 44 percent in the smelter and Croatian aluminium producer TLM holds 12 percent. It produces around 160,000 tonnes of aluminium a year and has annual exports worth around 150 million euros.

Like other smelters across the world, Aluminij has been hit by high electricity prices and a sharp fall in aluminium prices in the last three years caused by a supply surplus.

Other large companies included in the government's sale plan include Bosnia's only pharmaceuticals firm Bosnalijek, engineering company Energoinvest and the Fabrika Duhana Sarajevo tobacco company.

Novalic said the privatisation of strategic companies, such as the region's two power utilities and two telecoms companies, was not a priority at this stage. ($1 = 1.715 Bosnian marka) ($1 = 0.8771 euros)