Montenegro's Uniprom offers to buy aluminium firm KAP's assets

Montenegrin privately-held metals trader Uniprom has filed the sole bid in the second tender for the sale of bankrupt aluminium firm KAP's assets, offering to pay the starting price of EUR 28mn, daily Vijesti reported on Feb 20.

The offered price was somewhat lower than the EUR 28.5mn Uniprom proposed to pay in the first tender earlier this year.

The new offer includes EUR 76mn investments in raising the capacity to 120,000 tonnes of primary and 30,000 tonnes of secondary metal products by 2018 – the same as in the first tender. The investor is also again asking written statements from energy producer EPCG and power grid operator CGES that in the new contract for KAP's electricity supply the price per MWh, including distribution costs, will not go above EUR 38. Only under this condition Uniprom is ready to continue the production of primary aluminium and engage at least 300 workers in it.

The owner of Niksic-based Uniprom - businessman Veselin Pejovic, said after the bid opening on Feb 20 that if his company is not picked up as a buyer this time, it will not take part in any further sales attempt. He added his offer is the same as in the first tender. He explained he would pay the amount of EUR 28mn in two installments – of EUR 15mn first and then EUR 13mn.

Pejovic also asks the EUR 38 price per MWh to remain unchanged (not go up) in the next five years.

KAP's bankruptcy manager Veselin Perisic said that Uniprom has submitted a business plan for the period until 2018 based on the EUR 38/MWh price. He added that under the plan KAP will produce 60,000 tonnes this year, 80,000 tonnes next year, 90,000 tonnes in 2016, 100,000 tonnes in 2017 and 110,000 tonnes in 2018.

Uniprom is also asking the seller to secure a government decision in line with the special planning documentation that transforms the land belonging to KAP into an industrial zone, Perisic said.

Perisic should announce his final opinion on Uniprom's offer within the legal deadline of eight days. He said the sale is not certain yet since the offer contains some conditions that are outside the powers of the insolvency receiver.

Perisic added that in case the seller cannot secure the asked price of EUR 38 per MWh, the buyer's offer remains valid but its conditions are radically changing regarding the organisation of the production. In this case, Uniprom will give up the alumina refining, the smelter operations and the anodes production.

If the alternative business plan is implemented, i.e. without the production of primary aluminium, the necessary investment drops to EUR 50mn for the next five years.