Montenegro starts talks with Polish OT Logistics on sale of Luka Bar, Montecargo stakes

By bne IntelliNews February 15, 2017

Montenegro started talks with Polish port operator OT Logistics, which filed the sole bid in a tender for the privatisation of a 30% stake in its Montenegrin peer Luka Bar.

In October, Montenegro launched the tender, which had been delayed for years. The government holds a 54% stake in the port operator, but decided to initially offer a lower stake. Although the tender attracted interest from four foreign companies - from Poland, Italy, Turkey and the United Arab Emirates - the others gave up bidding for the stake and only OT Logistics filed an offer.

The Polish company has also filed the sole bid for the privatisation of a 51% stake in Montenegro’s state-owned rail cargo operator Montecargo, broadcaster RTCG reported. According to the head of the tender committee, Branko Vujovic, the two offers will be accepted or declined as a package.

“We will discuss these two offers as a package as a project of importance for Montenegro. We will see how the talks about Luka Bar go on and then, based on the outcome, will continue with Montecargo,” RTCG quoted Vujovic as saying.

OT Logistics has offered to pay €7.1mn for the shares and to invest another €17.1mn in Luka Bar within three years. The Polish company also plans to significantly increase the volume of cargo handled by the Montenegrin port operator – starting by 70% in the first year and rising to three times the current volume within three years.

The bidder has also offered to keep Luka Bar’s 412 employees for the next three years.

Luka Bar handled a total of 992,530 tonnes of cargo through September of which 661,290 tonnes were bulk cargo, the company said on its website.

According to the tender conditions, the buyer will be offered the right to manage Luka Bar for up to a year and the option to acquire an additional stake via capitalisation or sale of the acquired stake at the price reached at the tender.

OT Logistics has also offered to pay €2.5mn for the stake and to invest another €2.55mn in the acquisition of locomotives and IT solutions. The Polish company also plans to increase Montecargo's share of transportation of agriculture products through Montenegrin seaports to 50% as well as doubling the company's total cargo volume.

Montecargo was split from the cargo unit of railway transportation company Zeljeznicki Prevoz Crne Gore (ZPCG) in June 2009. ZPCG had been established several months earlier, when the national railway carrier split into two companies dealing with transportation and infrastructure maintenance.

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