Russian Tycoon Deripaska Seeks EUR 1billion Indemnity

Russian Tycoon Deripaska Seeks EUR 1billion Indemnity from Montenegro

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Wednesday, 14.08.2013.

11:03

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Russian Tycoon Deripaska Seeks EUR 1billion Indemnity from Montenegro The Government of Montenegro has rebuffed on Tuesday the claims by Russian En + Group tycoon Oleg Deripaska on the breach of contract and the forging of financial statements of the Podgorica Aluminium Complex (KAP) - the reason why En+ Group said it will sue the state of Montenegro. Russian Tycoon Deripaska Seeks EUR 1billion Indemnity The Russian Company, which is also KAP's co-owner, announced earlier today that it will sue Montenegro in front of Montenegrin and international courts over alleged failure to honour the settlement contract during the launching of insolvency procedure in KAP, and also for non-performance of obligations related to electricity subsidies and the forging of financial statements. En+ Group demands a one billion euro indemnification – a huge amount by all standards, in particular if applied to the tiny former Yugoslav republic, which total GDP in 2011 amounted EUR 3.23 billion. In its reaction, the government stated that „it did not make any move that was not in compliance with the applicable domestic and international legislation“, that it has fulfilled all of its obligations under the settlement contract signed in 2010 with En+ Group, and that the insolvency procedure was instituted in July in accordance with the law. KAP, the largest industrial company in Montenegro, was sold to Deripaska in 2005 for the sum of 48.5 million EUR but, following the conclusion of the settlement contract, the state took back a share in the company's ownership with 29.3% of its capital, which is exactly how much the Russian company retained. In July, the government introduced insolvency procedure in KAP, from which creditors claim around 360 million EUR, which is more than 10 percent of Montenegro's GDP. The largest creditors include the state of Montenegro, Deripaska's company and the national power company – EPCG. The Government recently asked the Parliament to approve a budget revision for this year, in order to borrow more and be able to pay 102 million EUR, the value of guarantees granted to KAP in order to borrow additional funds. However, the parliament rebuffed the government initiative, which is why the cabinet of PM Milo Djukanovic withdrew the budget revision proposal and is preparing a new one for September. VIP

Russian Tycoon Deripaska Seeks EUR 1billion Indemnity

The Russian Company, which is also KAP's co-owner,
announced earlier today that it will sue Montenegro in front of
Montenegrin and international courts over alleged failure to honour
the settlement contract during the launching of insolvency procedure
in KAP, and also for non-performance of obligations related to
electricity subsidies and the forging of financial statements. En+
Group demands a one billion euro indemnification – a huge amount
by all standards, in particular if applied to the tiny former Yugoslav
republic, which total GDP in 2011 amounted EUR 3.23 billion.
In its reaction, the government stated that „it did not make
any move that was not in compliance with the applicable domestic
and international legislation“, that it has fulfilled all of its obligations
under the settlement contract signed in 2010 with En+ Group, and
that the insolvency procedure was instituted in July in accordance
with the law.

KAP, the largest industrial company in Montenegro, was
sold to Deripaska in 2005 for the sum of 48.5 million EUR but,
following the conclusion of the settlement contract, the state took
back a share in the company's ownership with 29.3% of its capital,
which is exactly how much the Russian company retained.
In July, the government introduced insolvency procedure in
KAP, from which creditors claim around 360 million EUR, which is
more than 10 percent of Montenegro's GDP. The largest creditors
include the state of Montenegro, Deripaska's company and the
national power company – EPCG.
The Government recently asked the Parliament to approve a
budget revision for this year, in order to borrow more and be able to
pay 102 million EUR, the value of guarantees granted to KAP in
order to borrow additional funds. However, the parliament rebuffed
the government initiative, which is why the cabinet of PM Milo
Djukanovic withdrew the budget revision proposal and is preparing a
new one for September.

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