Graf von Westphalen advises EN+ Group in settlement with the State of Montenegro regarding KAP

In 2005, Central European Aluminium Company (CEAC), a subsidiary of Russia's EN+ Group, acquired a majority holding in Kombinat Aluminijuma A.D. Podgorica (KAP), an aluminum smelter company, and in Rudnici Boxita Niksic (RBN), the related bauxite mine company, from the State of Montenegro. KAP and RBN jointly account for about 15% of the GDP of Montenegro and over 50% of the country's export. Since 2006, the parties to this privatization process have had to work out some issues relating to the terms and obligations of the sale and purchase agreement. CEAC initiated international arbitral proceedings and filed a claim. On October 27, 2010 the parties finally managed to settle this dispute and the related arbitral proceedings in Frankfurt am Main.

This settlement envisages the Montenegrin largest company's recovery and long-term stable and profitable outlook. The parties agreed to reconsider an investment program for KAP the next five years. The State of Montenegro agreed to issue state guarantees amounting to EUR 131.7 million for KAP's existing debt obligations and future loans needed to secure the finance and production reorganization. CEAC transferred 29,36% in KAP and 31.82% in RBN to the State of Montenegro and re-mains shareholder with the same percentage with the right to repurchase the shares.

Graf von Westphalen successfully represented EN+ and CEAC in this post merger arbitration procedure since 2006 and the complex settlement negotiations.

Counsels to EN+ and CEAC:

Graf von Westphalen's team:

Dr. Matthias Menke (Corporate, M&A)
Florian Wolff (Finance, M&A)
Felix Prozorov-Bastians (Corporate Litigation, Russian Desk)
Eric Messenzehl (Corporate Litigation)
Dr. Marco Zessel (Associate, Corporate, M&A)

In-house EN+: Igor Ermilin
In-house CEAC: Maxim Nikitin
Counsel in Montenegro: Counsel in Montenegro: Goran Martinovic and Aleksandar Preradovic , Harrisions Solicitors, Podgorica

Counsel to the State of Montenegro:

Hogan Lovells International LLP: Dr. Volker Triebel, Dr. Ralf Hafner (Düsseldorf)