Sale of En+ Podgorica aluminum smelter’s assets halted by court
2MINS READ
A Cyprus court has granted an injunction on transactions involving the assets of a Montenegrin aluminum smelter, KAP, including a recent deal to sell it to a local company, Uniprom, for EUR 28 million ($38 million), En+ Group’s Pavel Priymakov told RIA Novosti on Monday.
Oleg Deripaska’s En+ Group was the largest private shareholder and investor (via CEAC Holdings Limited) in Aluminum Plant Podgorica (KAP). En+ bought controlling stakes in the smelter and a bauxite mine that supplied raw materials to it at privatization auctions in 2005.
CEAC, which was established in 2005 to manage En+ Group’s aluminum interests in Central and Eastern Europe, and the Montenegrin government each owned 29.3% of KAP prior to the company’s sale.
When the smelter filed for bankruptcy in 2013, the Russian company lost the right to manage the smelter and started legal action to recover debt. The Montenegrin government signed a deal to sell the smelter’s assets for EUR 28 million on June 10. The buyer, Uniprom, had planned to transfer the money within a few days.
The Montenegrin government intended to use the receipts to pay down the smelter’s EUR 350 million debt. En+ and CEAC are among its largest creditors. En+ Group, parent of Cyprus-registered Central European Aluminum Company (CEAC), has filed a claim for EUR 44 million ($60 million).
Deripaska wrote in a letter to Montenegrin Prime Minister Milo Djukanovic in April that his stake in KAP was confiscated illegally and pointed to numerous breaches of the law and of the creditors’ interests during the auction. He also said he would seek justice at international institutions.
Deripaska sent a copy of his letter to Russia’s Foreign Ministry.
CEAC had previously launched two arbitration procedures against the government of Montenegro for breach of the 2009 KAP settlement agreement and the foreign investment protection agreement between Cyprus and Montenegro. The claims total more than EUR 700 million ($952 million), including damages from the actions of the Montenegrin government.
