By Valentina Dimitrievska in Skopje July 24, 2018
Albania’s Balfin Group said it has signed a deal to acquire 100% of Kosovan ferro-nickel producer Newco Ferronikeli and aims soon to restart operations halted due to the company’s financial problems.
Newco Ferronikeli stopped operations four months ago and it did not operate at full capacity for the previous 18 months as it was affected by low nickel prices.
The acquisition will be made via US-based company NKL. The value of the deal was not disclosed.
Under the acquisition deal, Balfin Group plans to restart the Kosovan company's production and return it to full capacity during August, Balfin said in a statement on July 23.
It also agreed to repay the company's outstanding debts to suppliers and salaries to employees.
Newco Ferronikeli, based in the central region of Drenas, directly employs 800 people and is one of the biggest factories in Kosovo. It is also responsible for 1,500 supply jobs related to the plant.
The ferronickel complex includes a nickel production plant, while the surrounding area is rich with mineral deposits.
Balfin plans additional investments in Newco Ferronikeli to increase nickel production to over 10,000 tonnes per year from the current 7,200 tonnes.
Balfin is one of the largest privately held investments group in Southeast Europe with operations in Albania, Kosovo, Macedonia, Bosnia & Herzegovina and the Netherlands.
Newco Ferronikeli has changed owners several times since its privatisation in 2005.
In another deal in the sector, earlier this year Swiss GSOL, which is part of Switzerland-based investment company FOS Asset Management, agreed to restart Macedonia’s idled ferro-nickel producer Feni under a lease agreement. Previously Feni was forced to stop production due to its huge debts.
Nickel prices rose sharply in the first few months of 2018, reaching a three and a half year high at the end of May, shows data from precious metals retailer and news service Kitco Metals. The price rise was supported by the US Treasury Department’s April 6 round of sanctions on Russia, which sparked fears future sanctions could affect metals major Norilsk Nickel. Despite falling since then, prices remain at a higher level than at any time since mid 2015. Future demand is expected to be strong as nickel is a key input for the production of electric car batteries.