Bloomberg
Montenegro to Repay Deutsche Bank Loan to Kombinat Aluminijuma
Edited by : AL CIRCLE
2 min read
Montenegro will pay back a 22 million-euro ($29.3 million) loan that Kombinat Aluminijuma Podgorica AD (KAPG), a unit of Russian billionaire Oleg Deripaska’s En+ Group, took out from Deutsche Bank AG (DBK) and failed to service.
The German bank told the government late yesterday that it is activating a guarantee the state provided in 2009 when it backed the loan to the aluminum producer, the biggest industrial plant in the smallest former Yugoslav republic. Montenegro will use budget proceeds to satisfy the bank demands, the Finance Ministry said in an e-mailed statement today.
Authorities asked the company’s Russian managers last month to acknowledge it can no longer service the loan, which would’ve shifted the liability to the state under the original loan conditions. The management refused to sign the documents, which triggered an “accelerated procedure” last week for the full principle plus 1.4 million euros in maturing interest, the Finance Ministry said.
“The government of Montenegro, as the guarantor, will meet the obligation” by the end of next week, it said.
Montenegro sought to regain control of KAP and stop subsidizing the electricity it consumes, a key cost in aluminum production. Previously it also backed other KAP loans, totaling 132 million euros.
KAP spokesman Goran Skataric said the company had no immediate comment on the ministry statement.
En+ Group Ltd. offered on Feb. 17 that all KAP debts be converted into equity, including 86 million euros to En+. It also threatened legal action against any unilateral attempt to wrest away its current 29.3 percent stake in KAP.
The German bank told the government late yesterday that it is activating a guarantee the state provided in 2009 when it backed the loan to the aluminum producer, the biggest industrial plant in the smallest former Yugoslav republic. Montenegro will use budget proceeds to satisfy the bank demands, the Finance Ministry said in an e-mailed statement today.
Authorities asked the company’s Russian managers last month to acknowledge it can no longer service the loan, which would’ve shifted the liability to the state under the original loan conditions. The management refused to sign the documents, which triggered an “accelerated procedure” last week for the full principle plus 1.4 million euros in maturing interest, the Finance Ministry said.
“The government of Montenegro, as the guarantor, will meet the obligation” by the end of next week, it said.
Montenegro sought to regain control of KAP and stop subsidizing the electricity it consumes, a key cost in aluminum production. Previously it also backed other KAP loans, totaling 132 million euros.
KAP spokesman Goran Skataric said the company had no immediate comment on the ministry statement.
En+ Group Ltd. offered on Feb. 17 that all KAP debts be converted into equity, including 86 million euros to En+. It also threatened legal action against any unilateral attempt to wrest away its current 29.3 percent stake in KAP.
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