ECONOMY MINISTRY URGES CHANGE OF BANK GUARANTEE FOR IRONWORKS

ZAGREB, Feb 28 (Hina) - Croatia's Economy Ministry on Friday requested the Russian company Mechel to change the text of a bank guarantee for the purchase of the bankrupt ironworks in Sisak, seeking guarantees for damages in case the sales contract is terminated. #L# The ministry yesterday received a bank guarantee from Mechel to the effect that its Conares Balkan company will not terminate the contract but ensure jobs for all ironworks employees over the next five years. The text of the guarantee, however, states the guarantee becomes invalid if the sales contract is terminated in part or completely. Another problem is the payment of salaries. The Economy Ministry agreed with the ironworks unions that salaries would be paid once the sales contract had come into force. The payment was based on the buyer's bank guarantee, i.e. the purchase of spare parts and raw materials stored in the ironworks' warehouse. Conares Balkan has not signed a contract on the purchase of spare parts and raw materials necessary to start production, which has delayed the payment of salaries for January. For the sales contract to become effective, the Croatian government has been asked to lift mortgage on certain plants in the Sisak ironworks, which is why the mortgage funds cannot be used to pay out the January salaries, the Economy Ministry said. (hina) ha