Montenegro eyes bankruptcy for stricken aluminium plant
PODGORICA, June 14
PODGORICA, June 14 (Reuters) - The Montenegrin government filed a court motion on Friday to consider bankruptcy for the country's single biggest industrial employer, indebted aluminium plant KAP, which faces having its electricity cut off over unpaid bills.
Kombinat Aluminijuma Podgorica employs 1,200 people and accounted for 4.7 percent of the tiny Adriatic republic's economic output last year.
But the debt of the company, which is jointly owned by the state and the Central European Aluminium Company of Russian billionaire Oleg Deripaska, amounts to some 350 million euros ($467 million), equivalent to one tenth of gross domestic product (GDP).
It soaks up 3 million euros of state subsidies every month and lost 16.2 million euros in the first quarter of the year.
The motion, initiated by the finance ministry, foresees bankruptcy management taking control of KAP cash flow, assets and liabilities until the court rules on July 16 whether to declare the company bankrupt, said court-appointed manager Veselin Perisic.
"The bankruptcy management will also prevent unauthorised sale of KAP assets and all potential mismanagement," Perisic said.
KAP is weighing on the Montenegrin economy, which saw rapid growth driven by construction and foreign investment in the wake of independence in 2006 but will eke out more meagre growth of 1-2 percent this year. Since 2009, public debt has soared from 37 percent of GDP to 54 percent.
KAP's woes have left the country of 700,000 facing being cut off from European power next week unless grid operator CGES pays for the electricity it has been providing to KAP from a European interconnector, under a ruling by the European Network of Transmission System Operators for Electricity (ENTSO-E).
CGES said it took power from the interconnector to supply KAP after utility EPCG and state-run Montenegro Bonus suspended supply to the company, citing unpaid bills of more than 70 million euros.
CGES urged the government on Friday to secure payment of KAP's bills, saying that otherwise it would shut off power to the plant on Monday at 3 p.m. (1300 GMT). ($1 = 0.7496 euros) (Reporting by Petar Komnenic; Writing by Aleksandar Vasovic; Editing by Dale Hudson)