Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

En+ to Cede Half of Stake In KAP Plant

PODGORICA, Montenego — En+ Group will give up majority control of Montenegro’s only aluminum plant by transferring half its stake to the government in a deal that will slash the work force at the smelter and a nearby mine.

En+ Group said Tuesday that the government of Montenegro would issue guarantees on up to 135 million euros ($201.1 million) in debt to cover loan repayments and redundancies at Kombinat Aluminijuma Podgorica.

The agreement ends a dispute between the Russian group and the government of Montenegro. Both sides have agreed to withdraw claims against each other in international courts and each will own 29.365 percent of the smelter after the deal is completed.

“The agreement will secure the continued work of Montenegro’s largest enterprise, preserve hundreds of jobs and ultimately solve the crucial issues of high electricity tariffs and excess staff,” En+ CEO Vladislav Solovyov said.

He said the agreement should bring “long-term profitability” to the smelter.

Montenegro’s economy draws heavily on Kombinat Aluminijuma Podgorica, or KAP. The plant contributes more than 15 percent of the country’s gross domestic product and accounted for 41 percent of its exports in the first eight months of 2009. KAP has been running at a loss since global metals prices fell last year and has previously said it plans to halve aluminum output to about 60,000 metric tons in 2009.