Montenegro focuses on finding a strategic partner for KAP

The Montenegrin government is dedicated to resolving relations with their Russian partner when it comes to aluminium plant KAP, Prime Minister Igor Luksic told Radio of Montenegro in an interview. The country will focus on finding a strategic partner similar to the situation with another Montenegrin company, Ironworks.

Montenegro has equal shares in a 58% stake in the aluminium plant with the EN+ group of Russian billionaire Oleg Deripaska. In the interview, Luksic said that KAP had the potential to become a serious development opportunity. "However, in its present condition, KAP is only a problem but, if we succeed in resolving our relations with the Russian partner, and lay foundations for that project in a slightly different manner, it seems that we can find a good investor that will create both new jobs in the company and production facilities," Luksic said.

Meanwhile, KAP ended last year with a loss of EUR86.66m, as opposed to a EUR93.5m net profit it made in 2010. Citing a report published on the Securities Commission website, MINA news agency said the company's revenues increased last year by 22.7% to EUR174.5m, while its operating income was EUR188.77m, up 9.9% on the corresponding period.

In February, the government took over the troubled KAP aluminium plant including EUR132m in debts. Owner Deripaska failed to revive the smelter after taking a majority stake in 2005.

Luksic said that the government was working on the implementation of parliament's conclusions, and initiation of international arbitration, adding that it would try to negotiate consensual termination of agreement with the Russian partner in the meantime.