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Dubai Holding Buys Radeče Papir, Eyeing Paloma

Radeče, 13 December (STA) - Dubai-based financial holding Emkaam Investments is in the midst of completing the purchase of bankrupt paper producer Radeče papir and is already setting its sights on a new acquisition target, tissue maker Paloma.

Emkaam committed to the purchase Radeče papir in October, as part of which it deposited 10% of the EUR 5m purchase price with the full transaction expected to be completed in the coming days.

In line with plans of the holding, the once-proud Slovenian paper producer is scheduled to relaunch operations in January 2014, Emkaam's Slovenian contact Igor Rakuša has said.

The Dubai-based holding is ready to invest more than EUR 10m in the production, after which the state would chip in EUR 2m in financial incentives for foreign direct investments.

A total of 70 workers are to be hired initially at Radeče papir, whereby that number is expected to gradually rise to 150. Another 100 are expected to be employed in its subsidiary Muflon.

Before the failed public auction for the paper mill last November, interest in the company which has debts of EUR 42.5m was expressed by Turkish company Saray, which carried out due diligence but then failed to pay a security deposit for the auction.

The Turkish company first offered EUR 15m for Radeče papir, but lowered the offer to EUR 6.1m after carrying out due diligence. When the state refused to subsidise social contributions for workers in the first three years, Saray lowered the bid to EUR 1.2m.

France's Oberthur also appeared as a potential buyer, but it withdrew after carrying out due diligence, saying that Radeče papir should be modernised and buying it in its present form would present too much of a risk.

Meanwhile, Emkaam has reportedly set its sights on another acquisition target in Slovenia, as it is considering bidding for tissue maker Paloma, one of 15 companies on the government's list for privatisation.

Rakuša confirmed the news for the daily Dnevnik on Friday. The paper reports that the holding is one of several potential bidders for Paloma, with Slovakian company SHP and Serbia's Drenik DN being mentioned as well.

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