SARAJEVO, June 17 (Reuters) - Bosnia’s aluminium smelter Aluminij Mostar is seeking a strategic partner to avoid bankruptcy and a consortium led by London-listed miner and commodity trader Glencore has shown interest, its general manager said on Monday.
Aluminij, based in Bosnia’s southern town of Mostar and one of the Balkan country’s biggest exporters, has been in trouble for years over heavy debt accumulated because of high alumina and electricity prices.
The company was brought to the brink of closure last year but the government of Bosnia’s autonomous Bosniak-Croat Federation, which owns a 44% stake in the smelter, has helped it stay online.
The government has cautioned however its future support would depend on the findings from an audit of the Aluminij’s operation it had commissioned.
Federation Industry Minister Nermin Dzindic said on Monday the audit had shown that Aluminij could resume operating if it found a strategic partner which would help it re-organise, or otherwise face bankruptcy.
Dzindic said that Aluminij’s total debt amounted to 377 million Bosnian marka ($217.2 million), of which 280 million marka was to the state utility EPHZHB, which last week stopped supplying Aluminij with electricity at favourable prices agreed with the government last December.
Aluminij’s General Manager Drazen Pandza said it was hard to find investors ready to take risks with regards to the company’s debt and high electricity prices but talks were under the way with the consortium led by Glencore, the Aluminij’s long-time trade partner.
“The consortium is in principle interested to take part in the privatisation of Aluminij,” Pandza said. “The next phase for them is to talk to the government representatives about technical aspects.”
A spokesman for Glencore declined to comment.
Dzindic said that any strategic investor would seek favourable electricity prices but that the government could not subsidise the prices on open market.
He said the bankruptcy would not mean the closure of Aluminij but its re-organisation.
Aluminij, in which small shareholders own a 44% stake and the Croatian government a 12% stake, employs about 1,000 people. Its closure would put at risk some 10,000 jobs, taking into account its contractors and aluminium processing firms it supplies with the metal. (1$ = 1.736 Bosnian marka) (Reporting by Daria Sito-Sucic and Barbara Lewis; Editing by David Evans)