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VÚB seeking investor for copper firm

Slovak commercial bank VÚB said on June 14 it was looking for a strategic investor for troubled copper producer Kovohuty Krompachy AS. Kovohuty, Slovakia's biggest copper producer, fell into crisis last November, as falling prices forced the company to halve production of its core product, copper wire, and to cut its workforce.

In November, VÚB, Kovohuty's creditor, took ownership of Kovohuty's assets after the company was unable to repay loans. "In our first attempt to solve Kovohuty's problems, VÚB placed the plant into the hands of domestic firm Vitrium AS," VÚB spokesman Norbert Lazar said. "But it became clear later that Vitrium could not fulfil its business plan, and now we are looking for a foreign investor," he added.

Lazar said the bank had already negotiated with two US investors and one German investor. "We prefer an investor who would buy Kovohuty as a whole, not for example only the copper wire plant, which is the most lucrative part of the company," he said. "So far, one of the investors we talked to had already offered to observe that condition... but there has been no deadline set, and a better offer could still appear," Lazar said. He was unable to say whether production at Kovohuty was running and could not disclose the company's 1998 results.

Kovohuty's management was unavailable for comment.

Kovohuty, which had been processing mainly Chilean and Russian ore and handling 10,000 tonnes of pure copper annually, employed around 1,000 workers before the crisis. Last November, the company said it was expecting sales to fall to around 1.4 billion Slovak crowns ($32 million) in 1998 from some 2.5 billion in 1997. Output of copper wire was expected to fall to 24,000 tonnes in 1998 from 30,000 the year before.

Kovohuty exported some 75% of its production mainly to the Czech Republic, Germany, Austria and Croatia.

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