The future of troubled nickel company Larco depends on the success of the complex undertaking of its privatization, which will start immediately. A bill submitted on Monday in Parliament by the Energy Ministry sets a specific timetable for the sale of the state company’s assets and clearly provides for the obligation to submit a bankruptcy application in case the transfer of at least 75 percent fails.
The legislative intervention provides for the appointment of an administrator next month and the coverage of Larco’s operating costs through one last injection by the state until the completion of the privatization. The cost of that injection will be deducted in advance from the price.
The administrator will immediately implement initiatives to reduce expenditure, including slashing salary costs by an average of 25 percent. Cuts will mainly affect older and highly paid employees earning more than 2,000 euros per month, while the salaries of new and low-paid employees will remain unchanged. Average annual salary costs at the troubled mining enterprise approach 44,000 euros per worker, while salary costs for the highly paid top 73,000 euros per annum.
The bill further provides for a fast-track arbitration process to resolve any differences between the corporation and the state so as to clarify the ownership of the Larymna smelting plant, which is a prior action required for the tender to concede the assets. The administrator will also perform the international tender for all or part of the assets within 15 days of the arbitration decision and will proceed rapidly so that it is completed within 12 months.
If no proper bid is submitted, the tender will be repeated within 30 days, and if that proves fruitless too, the Larco assets that will not be sold will be auctioned in part or in full through free negotiations following a public invitation.
The bill also relieves Larco board members from any liability during the privatization process or in case the tender procedure ends up in a bankruptcy application.