Monday, October 1, 2007


MOSTAR, Bosnia (October 1,2007) - Three bidders for an 88 percent stake in Bosnia's sole aluminium plant, Aluminij Mostar, have conditioned their bids on cheap power supplies, a top privatisation official said.

The companies are Swiss-based commodities trader Glencore International AG in a consortium with a Croatian and local firm, Britain's En+ Group and Greek metals, energy and engineering group Mytilineos.

The minimum price for the stake, equally owned by the FBIH entity government and small shareholders, was set at 76.8 million Euros (108.7 million US Dollars).

"They link the price of aluminium on the London Metal Exchange with the electricity price," said Enes Ganic, the head of the FBIH entity privatisation agency.

"They also condition future investments and construction of a new plant with low power prices," he added.

Ganic said the conditions were unusual.

"We have guaranteed to secure them with needed quantities of electricity but not to supply them with cheap electricity.This is highly unusual," Ganic said.

He said the commission would review all bids by next Thursday, contact the bidders to determine if are sticking to their requests and then forward a report to the government.

"We had earlier decided to negotiate the price of power with the best bidder," Ganic said.

"But we have never considered a possibility of awarding Aluminij Mostar some privileged status in terms of power supply. The company is a qualified buyer and can purchase the power at a market price even abroad."

Ganic said the government would have the final say.

"Only government can make the decision on whether to annul the tender altogether or consider to subsidise Aluminij, if it decides that its privatisation is of strategic importance."

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