With Abraham Group Offer, bankrupt Aluminium Smelter would need up to Thousand Years to repay Debt

February 24, 2020 11:15 AM

 

 

 

The Aluminum Shareholders Assembly will reject the offer of the Israeli-Chinese consortium of the Abraham Group to lease a part of the plant of the company, it was clear on Thursday when the Federation government stated that there are a number of ambiguities, technical errors and contentious parts of the contract, Vijesti.ba news portal reports.

Under number one, in their final memorandum as they called it, these investors demanded that Aluminum Industries, a newly established company whose registration process has not been completed, have free electricity for at least five years ?!

It was quite enough for the line ministry and the Government as a whole to reject such an offer and decide not to accept it.

However, it will again call on the Abraham Group to propose a new model of cooperation. On the other hand, the contract for the lease of part of the plant did not require free electricity, but it was completely unacceptable for the Government, and it turned out for small shareholders, a monthly rent of 30,000 BAM was offered.

Eight months ago, Aluminum was cut off due to the debt of Elektroprivreda electricity company of almost 300 million BAM, and the company has a debt of 400 million BAM.

With such a low rental price as offered, it would take 450 to 1,000 years to repay the Aluminum debt, as calculated!

The Federal Minister of Energy, Mining and Industry Nermin Dzindic said on Thursday in Mostar that the Federation of Bosnia-Herzegovina Government at a session of the Aluminij Mostar Shareholders Assembly will not accept the lease agreement with the Abraham Group.

Dzindic said that they received a lease agreement last week, and before that, the Aluminij Supervisory Board approved and agreed to that agreement. They, however, made a procedural error; instead of “Aluminij Industry” they gave consent to the agreement between “Aluminij Mostar Ltd. and the Abraham Group,” said Dzindic at a press conference in Mostar.

According to him, there are a number of technical errors about the lease agreement and therefore this agreement is unacceptable to the Federal Government, because there are several errors in the agreement, from the mistake in the name to the annexes that are mentioned. For example, certain annexes are mentioned in the agreement, and in the end, Annex A is mentioned and then in the English version, it is said that the annex would be added subsequently, etc.

He also stressed that the Management, the Supervisory Board and all participants in the decision-making process will be given 30 days to correct the errors and return them to the FBiH Government.

“We are in favor of protecting the capital, future jobs, because under this agreement, unfortunately, this will not happen. Our goal is first and foremost to ensure that the partner who comes will guarantee the retention of jobs, not that the signatory of the agreement be a company that is neither registered in the tax administration nor has an account with the bank,” Dzindic said.

Asked what would happen if Aluminij’s small shareholders, which hold 44 percent of the capital, and the Republic of Croatia with a 12 percent stake, accept the agreement, Minister Džindić said that the FBiH government would be outvoted in that case.

The Mostar-based Aluminij production facilities were shut down on July 10, 2019, after the company was disconnected from the power grid due to accumulated debt, according to Fena.

 

 

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