Ugljevik Mine and Thermal Power Plant in debt, Slovenians awaiting payments

The Ugljevik Mine and Thermal Power Plant (RiTE Ugljevik) has no money to pay its due obligations to the Slovenian Elektrogospodarstvo, which is why it is issuing shares worth 27.5 million convertible marks, which should be purchased by Maticno preduzece Elektroprivreda RS (parent company).

The proposal for a decision on the issuance of shares will be discussed at the Shareholders’ Meeting scheduled for October 16.

It is already clear from the proposal that the decision will be given the green light and that Maticno preduzece, as the majority shareholder, will purchase shares in the amount of about 20 million, which is currently the amount of the due debt to the Slovenians.

It is also clear that another issue of 20 million will be needed to settle its obligations to the Slovenians for this year, given that two more installments are due at the end of the year.

As a reminder, RiTE Ugljevik was ordered by an arbitration decision of a court in Belgrade in mid-2023 to pay the Slovenian Elektrogospodarstvo EUR 67 million and the same amount in interest for undelivered electricity from 2011 to the beginning of 2022, and to deliver a third of the electricity produced to them as long as it is in operation.

Arbitration decisions charge RiTE hundreds of millions of euros

In the meantime, an amendment to the arbitration decision was made, which obliges RiTE to pay the Slovenians another EUR 62 million for undelivered electricity from 2022 to 2024.

In early 2024, contracts were signed with the Slovenians for the delivery of electricity and the repayment of the principal of EUR 67 million, while at the end of that year, a contract was signed to settle the debt based on undelivered electricity from 2022 to early 2024 in the amount of EUR 62 million.

The issue of interest of EUR 67 million and arbitration before the court in Washington, which the Slovenians initiated on the same basis, remains unresolved.

RiTE paid the first installment of the principal under the agreement signed in early 2024, while problems began with the second one, because they failed to pay about 1 million convertible marks in interest.

In the request to Maticno preduzece, the management of RiTE states that the third installment in the amount of about 10 million convertible marks with interest was due on June 30, as well as the first installment under the agreement signed in late 2024 in the amount of about 9.3 million convertible marks.

They point out that they cannot secure that money from regular business activities, so they invited them to exercise their pre-emptive right and pay for shares in the amount of 20.07 million marks.

Negotiations in final phase

This request was considered by the management of Maticno preduzece, which in its conclusion states that this year, obligations of approximately 20 million convertible marks are due under the agreement on repayment of the principal of the debt, and another 20 million convertible marks of obligations under the agreement on the recognition and settlement of the debt for undelivered electricity from the beginning of 2022 to January 31, 2024.

– Given the fact that Maticno preduzece is not able to secure 40 million in the account that it would reserve for the implementation of the RiTE Ugljevik share issue for 2025, the management is of the opinion that two share issues of 20 million each should be made – the management’s conclusion states.

As a reminder, RiTE Ugljevik is obliged to pay a total of approximately 372 million convertible marks to the Slovenian Elektrogospodarstvo by an arbitration decision of the court in Belgrade, which was made in mid-2023.

Settlement agreements have been signed for most of that debt, while the issue of the payment of EUR 67 million remains unresolved and is currently under negotiation.

RS Minister of Energy and Mining Petar Djokic recently said that the Slovenians had reduced the claim from EUR 67 million to EUR 37 million and that final talks on that were underway.

Mješoviti Holding ERS - MP a.d. Trebinje - ZP RiTE Ugljevik A.D. Ugljevik

Ministarstvo energetike i rudarstva RS

Elektrogospodarstvo Slovenia

Petar Đokić

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