Montenegro's KAP seeks another delay to repay EUR 25mn OTP loan instalment.

By bne IntelliNews March 18, 2013
Montenegrin aluminium smelter KAP is seeking another delay in the repayment of a EUR 25.2mn loan instalment to Hungary's OTP Bank as it has no money, radio and TV broadcaster RTCG reported. KAP's management has asked the government for an approval to delay the payment until the end of April, the company's spokesperson Goran Skataric said. Once the government approves the request, it will be sent to OTP Bank to decide whether it would allow the delay in payment. The report says that if OTP does not receive its money, it has the right to activate a EUR 50mn state guarantee on the loan. However, the Montenegrin government has so far managed to negotiate the Hungarian bank to wait and hopes to do so now again. KAP was due to pay the EUR 25.2mn instalment in December 2012 and OTP already approved once a delay until March 2013. The government is one of the biggest single shareholders in the company along with Russia's CEAC with a 29.4% share each. In April 2012, the government had to pay KAP's EUR 23.2mn (0.7% of GDP) debt to Deutsche Bank after the state guarantee on the loan was activated.

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