Montenegro’s Privatisation Council invites new tenders, cancels two privatisation agreements as partners fail to meet obligations

Podgorica, Montenegro (25 October 2013) – At yesterday’s meeting of the Council for Privatisation and Capital Projects, chaired by Prime Minister Milo Đukanović, two agreements have been cancelled due to the failure of privatisation partners to meet their obligations under the privatisation agreements. The companies that were subjects of the agreements are the New Tobacco Plant AD Podgorica and AD Marina Bar.

A consortium of Montenegrin and regional tobacco processing companies (comprising Partner Company doo Danilovgrad, Primat doo Užice, and Jaz Express doo Budva) failed to settle its financial obligations as stated in the agreement on privatisation of 100% stock of the New Tobacco Plant, as well as to meet two extension deadlines they requested. Having this in mind, the Council declared the privatisation tender unsuccessful. The Council asked immediately the Tender Committee to initiate a new tender procedure, and to propose potential privatisation models for the New Tobacco Plant.

The Council also adopted the proposal of the Ministry of Transport and Maritime Affairs to cancel the agreement with Latvia’s Multikapitals SIA Riga on the privatisation of 54.3% of AD Marina Bar stock, due to unlicensed disposition of the Marina shares. Namely, Multikapitals SIA Riga deposited the shares with the AS Latvijas Krajbanka bank without seller’s consent, which is contrary to the provisions of the acquisition agreement. In the meantime, an insolvency process for AS Latvijas Krajbanka has been initiated due to bankruptcy, rendering it unable to meet its obligations. Having this in mind, the Council authorised the seller to initiate the procedure of cancelling the agreement, which in turn means the Concession Agreement will also have to be cancelled.

NEW TENDERS

The Council for Privatisation and Capital Projects authorised the Tender Committee to release a tender for long-term lease of 37.202 m² of land in the area of Tivat for the purposes of building a golf course complex. The land is owned by Montepranzo Bokaprodukt firm from Tivat, and the decision to issue a tender will usher in the Agreement on land lease for building a golf complex in Tivat.

The Council has also adopted information documents on the sale of 76.5% of Bijelo Polje-based Jekon firm stock, and on the sale of 64.1% of Berane-based AD Polimka, noting that all obligations have been honoured.

The Council tasked the Tender Committee to issue a call for tenders for the military tourism complex Mediterranean and former military barracks Radoje Dakić in Žabljak (north of Montenegro), military tourism complex Bigovo-Trašte, Lastavica island and Mamula fortress, area of Pećine (Bay of Kotor area), and EcoLodge Vranjina (central Montenegro, near Lake Skadar).