The agreement between Turkish Tosyali Holding and Montenegrin state-owned power utility EPCG on the purchase of steel mill Zeljezara Niksic will be signed on 20 December.
The agreement will define the purchase of Zeljezara’s property and the plan is to establish a daughter company Zeljezara Solar Energy.
President of EPCG Board of Directors Milutin Djukanovic said that the company will become 100 % owner of Zeljezara’s property by 15 February 2023. The deadline for the first transaction in the amount of 15 million euros will be until 15 January, while the second part in the amount of 5 million euros will be paid by 15 February.
In August, Montenegrin Prime Minister Dritan Abazovic said that the Government has given the green light to state-owned power utility EPCG to start negotiations with Turkish Toscelik for the takeover of Zeljezara Niksic steel mill. He said that EPCG assumes the commitment to negotiate the sale price and the way to execute the acquisition of Zeljezara Niksic with the Turkish company.
Djukanovic said earlier that the steel mill has a huge potential for the installation of rooftop solar panels, adding that up to 60 MW in capacity could be installed. He also said that EPCG is considering converting part of the steel mill into a plant for the production of equipment for solar power plants, namely construction parts, adding that the company will seek a partner for such endeavor. Djukanovic also said that he believes that the Montenegrin state will help EPCG to finance the takeover of Zeljezara Niksic by purchasing EPCG’s own shares. Last week, Montenegrin state purchased 2.8 % of EPCG’s shares for 15 million euros.
Toscelik acquired Zeljezara Niksic in 2012, at the tender for 15.1 million euros. Toscelik suspended production activities at Zeljezara Niksic in March 2021, due to a drop in orders caused by the coronavirus pandemic. Last year, the Turkish company said it is in talks for the sale of the steel mill.