The Moscow Times citing Mr Igor Luksic Finance Minister of Russia as saying that Montenegro and the Central European Aluminum Company a subsidiary of Basic Element reached agreement on a bailout package for Kombinat Aluminijuma Podgorica, the country's biggest exporter.

Mr Luksic said the government of Milo Djukanovic will provide guarantees for a total of EUR 45 million to cover KAP's debt to commercial banks and a layoff plan for workers.

The Russian company will hand over half its holding to the government and withdraw claims for EUR 300 million in damages over an alleged false evaluation of KAP's assets before the 2005 takeover of the company.

Montenegro will receive a 29%t stake in KAP and 32% of the bauxite mines that are a part of the company as well as a right to veto decisions by the board of directors.

The company's production accounts for more than 15% of Montenegro's gross domestic product.

(Sourced from The Moscow Times)