Deripaska to Cut Montenegro Aluminum Plant Stake, Aircraft Jobs

June 18 (Bloomberg) -- Russian billionaire Oleg Deripaska, whose companies are trying to renegotiate more than $20 billion of debt, agreed to cut his stake in a Montenegro aluminum smelter and will fire 1,500 workers at aircraft maker Aviacor. He will give 50 percent of his shares of Kombinat Aluminijuma Podgorica to the government of Montenegro in exchange for power subsidies and 135 million euros ($188 million) of guarantees used to repay debt and boost working capital, KAP said today in a statement. Aviacor, which makes the An-140 turboprop airplane, will cut jobs as it seeks to break even by September, the Samara, Russia-based company said in a separate statement. Russian state-controlled aerospace group United Aircraft Corp. may become a shareholder, Aviacor said. Deripaska, 41, is Russia’s largest non-state borrower. He controls Moscow-based aluminum producer United Co. Rusal, which has until July 28 to rearrange $7.4 billion of foreign debt. En+, the unit of Deripaska’s Moscow-based Basic Element holding company that controls KAP, said in January it was forced to start talks with Montenegro’s government after aluminum prices collapsed. The company said at the time it may have had to shutter KAP, which accounts for 51 percent of Montenegro’s exports. Montenegro and EN+ subsidiary CEAC will each hold a 29 percent stake in KAP after the share transfer. Montenegro will also get a seat on KAP’s board. Investment Pledge EN+ and Montenegro will reconsider the pledge in Basic Element’s 2005 purchase agreement for KAP to invest 40 million euros in the plant, KAP said in the statement. Aluminum for delivery in three months rose $1 to $1,623 a metric ton at 1:02 p.m. on the London Metal Exchange. The metal, used in packaging, aircraft and automobiles, plunged 36 percent in 2008 and reached a seven-year low of $1,279 a ton on Feb. 24. Rusal and rival producers including Alcoa Inc. and Rio Tinto Group have cut output after demand plummeted. KAP said it has suffered “significant losses,” and aims to break even following the accord.