The tender commission in charge of the privatisation of Montenegrin cigarette producer Novi Duvanski Kombinat Podgorica (NDKP) hopes to negotiate a higher price for the company’s shares than the EUR 6mn offered by the potential buyers, the head of the commission Branko Vujovic was quoted as saying by daily Pobjeda on May 29.

The commission approved in early May as valid the sole bid in the fourth tender for NDKP – filed by a consortium of local firms Primat, Partner Company and Jaz Express, and last week launched talks with the investors.

The consortium offered EUR 6mn to buy 100% of NDKP (the government holds 70% and Podgorica city the remaining 30%) and pledged to build a new plant worth EUR 9.4mn and invest further EUR 1.5mn in equipment. It also offers to build the plant within 12 months and employ between 100 and 150 workers.

The price of EUR 9.4mn proposed for the construction of the plant is in line with the one sought by the government in the tender notice. The commission, however, is trying to raise the price offered for the equity stake and to convince the investors to keep as many of the existing some 190 workers as possible.

Vujovic said that the tender commission will have a session on Monday, June 3, adding he expects the price for the shares will be agreed by then and will top EUR 6mn.

He further said that the parties agreed that no more than 10% of the existing labour force will be laid off.

Previously, Montenegrin construction firm Kroling offered to build the new plant of Novi Duvanski Kombinat for EUR 12.85mn (in early 2013) and local firm Zetagradnja asked for EUR 13.3mn (in late 2012) but Montenegro turned down their offers, saying the asked price was too high.