Reuters: Bankruptcy News: UPDATE 1-Montenegro launches bankruptcy proceedings at smelter

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UPDATE 1-Montenegro launches bankruptcy proceedings at smelter Jul 8th 2013, 13:27 Mon Jul 8, 2013 9:27am EDT (Adds quotes, details, background) PODGORICA, July 8 (Reuters) - A Montenegrin court has launched bankruptcy proceedings for the country's single biggest industrial employer, indebted aluminium plant Kombinat Aluminijuma Podgorica (KAP), a court official said on Monday. The Adriatic state had last month asked the court to consider bankruptcy for the smelter, which is co-owned by the state and Russian billionaire Oleg Deripaska's Central European Aluminium Co. Proceedings were set in motion over a 24 million euro ($30.8 million) debt to Deutsche Bank, the deputy head of the Commercial Court in Podgorica, Dragan Rakocevic, said in a statement. "The court acted pursuant to a motion by the Finance Ministry ... and claimants now have 30 days to report their claims," Rakocevic said. Under Montenrgrin law, a bankruptcy procedure can either be launched through a reorganisation of the company or its total liquidation. KAP employs 1,200 people and accounted for 4.7 percent of Montenegro's economic output last year. Rakocevic said the company was nursing a total debt of some 380 million euros, more than the previously estimated 350 million, while its total value was estimated at only 183 million. "Debts and obligations of KAP are far above its real value, we will have to see what to do with claimants," Radocevic said, adding that the first court session with claimants was set for Sept. 15. The Montenegrin government said last week it had launched talks with unspecified lenders to secure 102 million euros to pay KAP's debt to Hungary's OTP and Russia's VTB bank . The loan, which would increase Montenegro's total 2013 borrowing plan by 46 percent to 220 million euros, was a part of a draft budget revision which also sees payment of 61 million of KAP's unpaid bills to power company Elektropirvreda Crne Gore. The government had initially set budget revenue at 1.6 billion euros or 33.3 percent of output and targeted a deficit of 2.7 percent of gross domestic product. ($1 = 0.7792 euros) (Reporting by Petar Komnenic; Writing by Aleksandar Vasovic; Editing by Louise Heavens and David Holmes) Link this Share this Digg this Email Reprints

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