Statement of Mr. Igor Lukšić, PhD, the Deputy Prime Minister and Finance Minister, on the occasion of adopting the Memorandum on joint cooperation and general consent between the Government of Montenegro and En + Group

The Government will issue guarantees for the part of total credit indebtedness of the Aluminum Plant (KAP) loan of 25 million Euros. The Government is ready to earmark the part of money from the budget funds for realization of the social programme up to five million Euros. We are ready to issue guarantees for indebtedness of the KAP, worth 20 million Euros. This money would be used for financing working capital and for the payment of outstanding liabilities to CKB. With the consortium of banks, we will negotiate the amount of guarantees which we are ready to provide for the part of outstanding debt. This is very important, because it is providing long term stability of the KAPs balance and creating conditions for changes in this company. We would like to hear what is the discount that banks ready to offer, i.e. in which manner will obligations on the basis of this loan be regulated in the next period. This implies changes to the Budget Law, because it is necessary that everything is in compliance with the Parliamentary procedure. This Memorandum is creating conditions both for Russians and the Government to abandon court procedures and to withdraw processed complaints. Adopted Memorandum is not the final action, because a number of activities need to be completed, prior to all negotiations with the consortium of banks that will start tomorrow, because it is our objective to resolve the problem as soon as possible. In this manner, the Government is addressing the workers who think that the Government should take over the ownership over both the KAP and Bauxite Mines from Russians. The Government was considering two options to cease the production and to resolve problems and create conditions for continuation of production. The analysis have shown that is neither realistic nor economically justified to close the KAP and Bauxite Mines. Thats why we decided to give them a new change, whereas the Government will have its member in the Board of Directors of KAP, who will have the right to veto which will be prescribed by the new purchase and sale agreement including the Decision on production levels. Comparing with the bankruptcy proceeding, this option proved to be cheaper for the state..