news 11 Jan 13

Bosnia's Federation Tries to Save Petrol Company

An offer to settle an eight million euro debt to British company Deltagrip could stop the Bosniak-Croat Federation’s ailing petrol storage company from going bust.

Elvira M. Jukic

The federation’s government said it will offer British fuel trading company Deltagrip a deal to settle the debt in instalments and prevent its petrol storage company from going out of business.

The debt arose from a ruling by the International Chamber of Commerce’s arbitration court over a broken contract.

The money could be paid off in instalments from revenues from petrol storage company Naftni Terminali Federacije, NTF, the federation's government has suggested.

“We should wait for a response from Deltagrip and based on that, determine further steps,” said NTF director Rasim Kadic.

“NTF is ready to pay a certain amount of money a month as an advance payment until the confirmation of the verdict.”

He was referring to the arbitration court’s verdict ruling that NTF must pay around 15 million KM (7.6 million euro) to Deltragrip for breaking the contract on the rent of a warehouse in the port town of Ploce in Croatia.

The case is also in the Croatian courts, since NTF's property and business are in Ploce, but the federation’s authorities are ready to accept the ICC's ruling so that NTF’s bank accounts can be unblocked and the company can continue to operate.

NTF was renting fuel warehouses to the British company but in 2006 also took a loan from Deltagrip.

When the Bosnian company could not pay off its debt and said it would raise rental costs, Deltagrip blocked its bank accounts, the Sarajevo-based Centre for Investigative Journalism reported.

NTF was founded in 2006 as the successor to a similar state company but quickly ran into problems, mainly due to bad management decisions, and has faced bankruptcy on several previous occasions.

It is estimated that the company is worth around 350 million euro and is important because it plays a role in affecting the price of petrol in Bosnia.

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