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The Government of the Republic of Serbia

In the service of citizens

Privatization revenues in 2005 total €390 mln

Belgrade, 28 December 2005

Serbian Minister of Economy Predrag Bubalo said today that privatisation was accelerated in the second half of the year, following the implementation of new regulations on the sale of companies, which allowed for the write-off of debts of firms that are being privatised.

Author: Fonet

Speaking at a working breakfast held at the Serbian Privatisation Agency, Bubalo told reporters that during 2006 the ministry will forward to the Serbian parliament four bills and four strategies from the field of economy. He added that currently the ministry is drawing up bills on cooperatives, entrepreneurs, balancing of regional development, and commodity exchange.

In addition, the strategies on economic development, privatisation register, and the privatisation of public utility companies and the city building land are also being prepared.

The minister said that the procedure for election of the advisor for telecommunications, which was suspended due to procedural reasons, should be wrapped up by January 15 next year.

Bubalo said that at tomorrow's session the Serbian government will look at the list of bids that have been submitted for the selection of privatisation advisor for the Serbian oil industry NIS. He said that the lowest price was offered by the consortium Merrill Lynch and Raiffeisen Investment, which is asking for a fixed fee of €900,000 for consultancy services and a 1.2 percent commission for successful work.

Six consortiums of renowned international companies submitted bids in the tender, and the selection of the NIS advisor is a condition for the termination of the current financial arrangement with the International Monetary Fund (IMF) and a write-off of approximately €700 million of Serbia's debt towards the Paris Club of Creditors, the Minister of Economy said.

Director of the Privatisation Agency Miodrag Djordjevic said that in 2005, Serbia pulled in €390 million from the privatisation of 501 companies, while the agreed investments totalled &;euro118.2 million.

He said that a total of 204 companies were sold at public auctions, 15 at tenders, and 282 blocks of shares owned by the state were sold on the capital market. The agreement on the sale of Javor from Ivanjica should be signed by the end of the year.

According to Djordjevic, the agency plans to sell 300 companies through public auction, to call 30 tenders and to sell 250 blocks of shares from the portfolio of the Share Fund.

He specified that in 2005, the Privatisation Agency conducted inspections of 1,007 contracts of sale and terminated 87 contracts. Since the beginning of the privatisation process, a total of 193 sale contracts have been broken.

Djordjevic said that this year, the agency took over the responsibility for bankruptcy proceedings, a process currently going on in 184 companies. The complete property of 24 common debtors was sold, while the sales of property of 12 companies were unsuccessful.