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The Government of the Republic of Serbia

In the service of citizens

Law on free distribution of shares to be adopted by late November

Belgrade, 5 November 2007

Serbian Minister of Economy and Regional Development Mladjan Dinkic said today that the government will adopt a strategy of privatisation of public companies by the end of the week and a law on free distribution of shares by the end of November.

This law might be adopted in parliament by the end of the year, Dinkic said.

He said that the right to shares will belong to all Serbian citizens of legal age, starting from those working in the state administration and education sectors, to pensioners, journalists and workers in public companies who have not been given shares so far.

The estimates of the Ministry are that around 4 million people will get the right to free shares.

The Minister specified that in the first round citizens will be given shares from the sale of 68 companies that have already been privatised and whose shares are in the privatisation register.

Dinkic specified that in this group are, among others, shares of Duvanska Industrija Nis (DIN), Duvanska Industrija Vranje (DIV), Beopetrol (now Lukoil), Henkel - Merima, Valjaonica Bakra Sevojno, Zdravlje from Leskovac, Jelen - Dola, of sugar and cement plants.

He explained that it is technically unfeasible to divide the shares of these companies between a large number of shareholders, so the Share fund will have to sell those shares, but not below the prices obtained in the privatisation process.

The shares will be sold at the stock exchange or to the already existing majority owner of a privatised company, and after that cash will be paid to citizens, Dinkic added.

In the second round, citizens will be given for free 15% of shares of the companies that are not privatised, and these are the Serbian oil industry (NIS), the Electric Power Industry of Serbia (EPS), Telekom, Jat Airways, the Nikola Tesla airport and Galenika.