Alro and BBG Alum's $12m dispute

Alro Slatina got only one month of peace. Following a privatisation that started last year and ended in October 2002 after the capital increase from Marco International, the current majority shareholder, Alro took the spotlight again due to a conflict with its alumina supplier, BBG Alum Tulcea. Over the past few weeks, Alro has stopped orders to BBG Alum, held by the British Balli trade company, therefore putting the plant in Tulcea in a jam, as BBG sales are nearly 100% dependent on Alro. The Alro officials say they stopped orders because of the $12 million BBG has to pay. Until recently, Alro, which is faring better in terms of cash, used to pay for the bauxite bought by Alum and got alumina in exchange, after paying some more money. The accumulation of BBG Alum’s debts was caused precisely by this process, sources on the market say. “Alum Tulcea has accumulated approximately $12 million in net debt to Alro Slatina. So far we have not received any reasonable proposition to settle this debt, no explanation as to how Alum Tulcea chose to spend this money,” Gheorghe Dobra, Alro general manager says. To cover its alumina needs, Alro started importing it. “In the absence of a guaranteed alumina supply, Alro sees its entire technological flow threatened, for which reason it has to take every step possible to look after its best interests,” Dobra says. The Balli officials would not comment on the situation. ZF