Italy’s A2A could file EUR 526mn claim against Montenegro – report

By bne IntelliNews August 19, 2013

Italy's A2A might file a EUR 526mn claim against Montenegro due to non-compliance with contractual obligations, state broadcaster RTCG reported, quoting a report by daily Dan. The shareholders of the Italian company, which manages and has a minority stake in Montenegrin state-controlled power producer EPCG, will reportedly decide on whether to launch an international arbitrary in September.

Around EUR 430mn of the A2A’s claim refers to the acquisition of the minority stake and recapitalization of EPCG while EUR 96mn relate to the expected profits, the report read.

A2A decision will largely depend on the situation with the aluminium smelter KAP which entered into bankruptcy on 8 July. In early August, Montenegrin power producer EPCG informed the commercial court in Podgorica that aluminium firm KAP owes it EUR 45mn, which is the amount it hopes to be paid back during KAP's insolvency process.  This claim, according to unofficial information, is enough to put an EPCG representative on KAP's board of creditors, which will be appointed next month. The government and Russia's CEAC Holding owned by Oleg Deripaska will also certainly have their representatives on the board. The board of creditors together with the insolvency receiver will be in charge of decision-making at KAP during the insolvency.

If A2A initiates an arbitration proceeding against Montenegro, this will likely put a stop to number of planned investments such as the construction of a second unit of the country’s sole thermal power plant TE Pljevlja as well as of undersea transmission cable between Montenegro and Italy, the report noted.

Related Articles

Fiscal consolidation measures to slow Montenegro’s 2017 GDP growth to 3%, IMF says

The International Monetary Fund (IMF) revised down its forecast for Montenegro’s ... more

Montenegrin PM's brother accused of making "death threat" to journalist

The Western Balkans Regional Platform for Advocating Media Freedom and Journalists’ Safety, a network of journalists' associations and media trade unions in Western Balkans countries, ... more

Money laundering probe into Montenegro's pro-Russian Democratic Front extended

Montenegro’s special prosecution has gathered new evidence and is extending a money laundering ... more