Montenegro's government said on Thursday it would launch a procedure to take full control of the Adriatic country's heavily indebted aluminium plant, in which it shares a controlling stake with Russia's EN+ company.
The government made the move after it was forced last week to assume a 132 million-euro ($172.16 million) maturing debt owed to foreign creditors by Kombinat Aluminijuma Podgorica (KAP), which it guaranteed in 2009.
KAP is Montenegro's sole aluminium plant and a key driver for its economy. However it has been losing money since global metals prices fell in 2009 and output at the 120,000 tonnes a year plant was cut sharply.
"The government has opted for this move in order to closely follow the situation in the plant and define the policies related to the further production of aluminium," Finance Minister Milorad Katnic told a news conference.
Katnic did not say if the takeover means an instant break of the contract with EN+, owned by Russian tycoon Oleg Deripaska, which owns a 29.7 percent stake in the plant while the remaining stake is owned by small shareholders.
In 2010, EN+ gave the Montenegro government a half of its 58 percent stake in KAP after it agreed to provide guarantees for its loan to repay other debt and pay for redundancies.
Economy Minister Vladimir Kavaric was quoted by local media on Thursday as saying the government would offer 1 euro to EN+ for its stake.
The KAP's maturing debt will put an additional burden on Montenegro's budget, which has not foreseen funds for its payment. The plant has a total debt of 350 million euro. ($1 = 0.7668 euros)
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