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RTB Bor privatisation board rejects A-Tec’s request
Belgrade,
9 April 2008
Serbian Minister of Economy and Regional Development Mladjan Dinkic stated that the board for monitoring and implementing the action plan for the restructuring and privatisation of mining and metallurgical complex RTB Bor agreed unanimously to recommend to the Serbian government to terminate the agreement with the first-ranked bidder, A-Tec.
Dinkic told the Tanjug news agency that the second-ranked bidder Russian SMR will be invited for negotiations.
He explained that the board made this decision because the Austrian company has not kept to the terms of the agreement and because it asked for deadline extensions, which is not acceptable.
The reason for rejecting is also the lack of confidence that A-Tec will fulfil the promised investment of $180 million in the construction of the new smelter in RTB Bor to reduce pollution, Dinkic said.
The board also concluded that both decisions would be legal: either termination of the agreement with A-Tec or an extension to the deadline for paying the agreed sum, the Minister said noting that the proposal to terminate the agreement was unanimously accepted. The guarantee of $10 million will remain in the Serbian budget, a part of which will be invested in modernising RTB Bor equipment, he explained. Dinkic, however, said that part of the already paid purchase price amounting to $150 million will be refunded to A-Tec.
SMR will be invited for negotiations, Dinkic said and explained that the proposal of SMR’s agreement is not acceptable, but expressed hope that a better contract will be reached through negotiations. SMR will have to prolong the validity of the guarantee and to correct some important elements of the agreement so that the transaction is completed successfully, Dinkic said.
Dinkic noted that if negotiations with SMR fail too, the possibility to negotiate with the third-ranked bidder remains, noting that 30 days are left before negotiations with the second-ranked bidder start, which is a deadline that can be extended by another 30 days.
Attending the session were Minister of Finance Mirko Cvetkovic, Minister of Environmental Protection Sasa Dragin, Minister of Employment and Social Policy Rasim Ljajic, Assistant Minister of Energy and Mining Dejan Rajkovic, Director of the Privatisation Agency Vesna Dzinic, representatives of RTB Bor management and trade unions.
He explained that the board made this decision because the Austrian company has not kept to the terms of the agreement and because it asked for deadline extensions, which is not acceptable.
The reason for rejecting is also the lack of confidence that A-Tec will fulfil the promised investment of $180 million in the construction of the new smelter in RTB Bor to reduce pollution, Dinkic said.
The board also concluded that both decisions would be legal: either termination of the agreement with A-Tec or an extension to the deadline for paying the agreed sum, the Minister said noting that the proposal to terminate the agreement was unanimously accepted. The guarantee of $10 million will remain in the Serbian budget, a part of which will be invested in modernising RTB Bor equipment, he explained. Dinkic, however, said that part of the already paid purchase price amounting to $150 million will be refunded to A-Tec.
SMR will be invited for negotiations, Dinkic said and explained that the proposal of SMR’s agreement is not acceptable, but expressed hope that a better contract will be reached through negotiations. SMR will have to prolong the validity of the guarantee and to correct some important elements of the agreement so that the transaction is completed successfully, Dinkic said.
Dinkic noted that if negotiations with SMR fail too, the possibility to negotiate with the third-ranked bidder remains, noting that 30 days are left before negotiations with the second-ranked bidder start, which is a deadline that can be extended by another 30 days.
Attending the session were Minister of Finance Mirko Cvetkovic, Minister of Environmental Protection Sasa Dragin, Minister of Employment and Social Policy Rasim Ljajic, Assistant Minister of Energy and Mining Dejan Rajkovic, Director of the Privatisation Agency Vesna Dzinic, representatives of RTB Bor management and trade unions.
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