Negotiations over privatisation of Institute Dr Simo Milošević AD Igalo underway

Podgorica, Montenegro (27 February 2015) – Government of Montenegro is pursuing intensive negotiations with the International Wellness Group - London (IWG), which has filed a sole bid for the acquisition of 56.4806% of share capital of the Institute for Physical Medicine, Rehabilitation and Rheumatology “Dr Simo Milošević AD Igalo”, President of the Tender Commission for Privatisation Branko Vujović told the press earlier today.

According to the purchase contract that is being negotiated, the IWG has assumed the obligation to invest a minimum of EUR 10 million over a 5-year period in equipment for medical rehabilitation, rheumatology and physical medicine. The bidder has recognised that the institute's special value is the existing professional stuff, trained to perform basic activities and the issue takes central stage in the negotiation process.

The bidder is also committed to making a minimum of EUR 50 million investment, including the medical equipment investment in the amount of EUR 10 million, within five years period following the takeover of the company, Mr Vujović underscored.

Depending on the results of the Feasibility Study and in line with the planning documents, the International Wellness Group has offered further investment in the amount of EUR 127 million over a 5-year period, as well as an expected investment over the sixth to eighth year period totaling EUR 55 million, Branko Vujović of the Tender Commission for Privatisation explained.

In his words, the purchase contact defines that the bidder will make an investment of EUR 15 million in the Villa “Galeb” in order to put it into operation and reach a 5-star level of quality, and EUR 25 million in Phase II to reach a 4-star level of quality. If the obligation is not fulfilled, the contract will be terminated unilaterally, he stressed.

Negotiations with the bidder will be concentrated on the need to maintain and develop basis functions of the institute as a well-known health centre and health tourism brand. The IWG’s intention, according to the contract, is to develop the institute into a centre of excellence, a Montenegrin brand that will be recognisable globally, Mr Vujović concluded.