The government of Bosnia & Herzegovina’s Muslim-Croat Federation has agreed to secure six more months state aid for troubled aluminium smelter Aluminij, allowing it to resume work, Indikator.ba reported on July 15.
Aluminij was forced to stop work last week as the power supply from Elektroprivreda HZHB stopped in the first minutes of July 10, after repeated warnings over the smelter's unpaid debts to its electricity supplier.
“The Federation’s government extended the financial consolidation of Aluminij for the next six months,” Indikator.ba quoted Zdenko Klepic, the chairman of Aluminij’s supervisory board, as saying.
He added that in these six months Aluminij’s management will seek to find a way to save the company from bankruptcy.
The plant will restart operations in several stages, after analysing the possible damages from the sudden stopping of work on July 10.
Aluminij's workers and management have warned that the shutdown means an imminent collapse for the company, particularly for its electrolysis unit, which cannot be restarted due to its complex production process.
Earlier in July, the Federation’s Minister of Energy, Mining and Industry Nemir Dzindic said that Aluminij would file for bankruptcy. Dzindic said that unless a strategic partner appears by the end of the year, Aluminij will go bankrupt. However, following the latest government decision, company representatives believe that bankruptcy procedures should not be initiated for the moment.
Several days ago London-listed Glencore pulled out from talks on a possible acquisition of Bosnia’s sole aluminium smelter. Talks with a second interested candidate - the UAE’s Emirates Global Aluminium (EGA) – so far have had no result either.
Local media reported rumours that Russia is also interested in entering Aluminij, but no details have been disclosed.
Dzindic said the government will continue talks with EGA and with all potential investors. He added that another firm has sent a letter of interest.
Aluminij, once one of the biggest companies in Bosnia, has significant outstanding debt, with 74%, or BAM280mn (€143.2mn), of it owed to Elektroprivreda HZHB.
Aluminij started preparing to halt operations in June as Elektroprivreda HZHB stopped delivering power at preferential prices. The smelter has been threatened with the shutdown of its operations and bankruptcy for years due to its accumulated debts.
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