Displaying items by tag: Nationalisation

Bolivia: The Bolivian Attorney General’s Office says that is open to meeting representatives of Sociedad Boliviana de Cemento (SOBOCE) in order to negotiate a ‘better arrangement’ following Bolivia’s nationalisation of a stake in SOBOCE subsidiary Fábrica Nacional de Cementos (FANCESA) by supreme decree in 2010. SOBOCE owes FANCESA US$108m in damages for unfair competition since that time.

SOBOCE said "SOBOCE, together with its shareholders of Grupo Gloria del Peru, will continue to resort to judicial and/or arbitration channels (national or international) for the recognition of their rights. We believe in justice and in the legitimate right that we have, since the Bolivian Constitution guarantees the payment of compensation in case of expropriation."

Angola: Nova Cimangola says that it is not being nationalised by the government. It has made the statement in response to local media reports that a state-led takeover is being considered as part of decree by President João Lourenço, according to the Jornal de Negócios newspaper. The cement company asserted that it is a private company with no public funding and that its financial, contractual and legal states are all in order. The company operates a 2.4Mt/yr integrated plant in Luanda.

Uzbekistan: Eurocement has become the third Russian company to risk losing assets in Uzbekistan after Wimm-Bill-Dann Foods (WDB) and MTS. The president of Eurocement, Mikhail Skorokhod, said that the Tashkent Region's Economic Court has granted a suit brought by Uzbekistan's State Competition Committee to invalidate the privatisation of JSC Akhangarancement, which was based on a decree that was signed in the mid-1990s. Eurocement became a shareholder in Akhangarancement eight years after it was privatised, buying 75% of its shares on the secondary market in 2006.

"We bought Akhangarancement in 2006," said Skorokhod. "We met all of the local legislative requirements, paid taxes and contributed to the solution of social and environmental problems. The enterprise was inspected from time to time, but no serious complaints were made. A few months ago a spot check involving nearly 20 organisations began. Despite the unprecedented scale of the inspection, nothing was found that violated the law. We found out on 16 July 2014 about the State Competition Committee's lawsuit to overturn the decree of 30 August 1994 on the privatisation of Akhangarancement. The Tashkent region's Economic Court accepted the suit on 17 July 2014 and the ruling was made on 21 July 2014 morning, in literally a few hours."

According to Skorokhod, the lawsuit cites items that were not taken into account in the privatisation, but none of them are capital assets (such as seedlings, furniture, enclosures, printers and trailers). Uzstroymaterialy, the state company that oversees the industry and Uzbekistan's Justice Ministry have deemed the lawsuit unfounded, but the court did not take its position into account.

Eurocement has 30 days to file an appeal. If the court upholds the first ruling, this will essentially mean the nationalisation of the asset. The plant is continuing to produce cement as usual. "If we don't get a positive court ruling in Uzbekistan, we will file a lawsuit in the International Centre for Settlement of Investment Disputes (ICSID) at the World Bank in Washington," said Skorokhod.

The attempted nationalisation is particularly troubling to Eurocement in light of the expansion plan it has for the plant. Eurocement has signed a contract with China CAMC Engineering Co Ltd for the provision of equipment, designs, installation supervision and employee training worth Euro95.0m for the construction of a new dry-process cement plant as part of the Akhangarancement plant. The new plant's capacity will be 2.4Mt/yr of cement. The launch is expected in 2016.

The contract includes the provision of the full range of equipment required for cement production, including mechanical equipment, furnaces, cyclone pre-heaters, grinders, mills, electrical and automatic equipment and monitoring and measuring devices.

Venezuela: The Venezuelan government has agreed to pay US$600 million to settle a claim from Cemex over the 2008 nationalization of Venezuela's cement sector. The case is one of many which the Hugo Chavez administration is facing after nearly 13 years of sweeping socialist reforms, including widespread nationalisations across the South American OPEC member's economy.

A Venezuelan government statement said the amount corresponded to 76% of the shares in the expropriated local unit but it was less than half the US$1.3bn Cemex had originally sought. "We've reached a favourable deal between both parties," Industry Minister Ricardo Menendez said in the statement. The government will pay US$240m initially, followed by four annual payments of US$90m, he said.

"We are convinced the agreement has been positive for everyone," the Venezuelan Information Ministry statement quoted Jaime Elizondo, Cemex's president for South America and the Caribbean, as saying.

The Chavez government announced the takeover of the cement sector in April 2008, targeting Cemex, Holcim and Lafarge. Lafarge and Holcim agreed to stay on as minority partners. Cemex disputed the case at the World Bank's International Center for Settlement on Investment Disputes. In late 2010, the court recognised Cemex's right to sue for the loss of its assets.