Investing in Bosnian aluminum

  • 2003-04-17
VILNIUS

The Bosnian-Serb Parliament has approved a new privatization deal for the Birac aluminum plant, paving the way for a Lithuanian investor to acquire the plant after 18 months of wrangling with the republic's former government.

The breakthrough in the privatization process came after the new Bosnian-Serb government agreed to reduce the price for a majority stake in Birac to 6 million Bosnian marks (3.07 million euros) and lower investment commitments to 11 million marks, the Lithuanian business newspaper Verslo Zinios reported April 12.

The Lithuanian investment company Ukio Banko Investicine Grupe purchased a 63.8 percent stake in Birac for 10.25 million Bosnian marks in late 2001 and promised to invest another 56 million marks.

The deal stalled when the auditing firm Deloitte & Touche reported that Birac's losses were $7 million higher than the government stated.

Lithuanian corporate and private investors account for two thirds of UBIG's investment capital. Foreign investors comprise the remaining third.