A Montenegrin commercial court decided on Monday, July 8, to launch bankruptcy proceedings at aluminium firm KAP after the finance ministry requested the move last month over some EUR 25mn of unpaid debt, daily Vijesti reported.

The head of the commercial court, Dragan Rakocevic, said the decision for launching the proceedings was adopted after an approval of the finance ministry and KAP’s executive director Dragan Mijovic.

Mijovic said a reorganisation plan for the company will be filed soon. According to him, an uncontrolled shutdown of the plant would put in danger the environment and human health, therefore the management aims to use the bankruptcy to restructure KAP’s operations.

Rakocevic said the current estimates of KAP’s debts reach an amount as high as EUR 380mn, while the company’s nominal value is only EUR 183mn. “KAP’s debts and liabilities are much higher that its value and we will see what will happen with the creditor claims,” he added.

The first meeting of KAP’s creditors is scheduled for August 15, while the hearing at which their claims will be discussed for September 15.

State TV and radio broadcaster RTCG reported that after the bankruptcy is introduced, state-owned firm Montenegro Bonus will take over the organization of KAP’s production. Montenegro Bonus is already supplying KAP with electricity and raw materials.

On the other hand, with the introduction of the bankruptcy the firm’s receiver is no longer obliged to keep the earlier signed contracts as they all will be invalidated and the aluminium could be sold on the open market.