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The Government of the Republic of Serbia

In the service of citizens

New tender for sale of Jugoslovensko Recno Brodarstvo

Belgrade, 18 March 2008

The Serbian Privatisation Agency in cooperation with the Ministry of Economy and Regional Development and in accordance with the decree on the sale of capital and assets by public tender, made the decision today to close the tender for the sale of 70% of the socially owned capital of the company Jugoslovensko Recno Brodarstvo (JRB).

According to the statement, bids received at the tender in the privatisation process of this company were ranked on October 30 in 2007. The consortium consisting of Tamoza Trading Ltd. from Cyprus and Daxin Petroleum PTE Ltd. from Singapore was declared the first-ranked bidder.

The second ranked bidder was the consortium consisting of Palmali Shipping SA and Palmali Holding Company Ltd. from Malta, the third East Point Holdings Ltd. from Cyprus and the fourth Transport Trade Services SA from Bucharest.

Bearing in mind that the top and second ranked bidders, following negotiations with the Privatisation Agency, without any explanation and in unclear circumstances withdrew from the transaction, the agency will use its legal right to claim guarantees payable by both bidders to the amount of €600,000.

Bearing in mind that the difference between the price offered by the top bidder and the third ranked bidder is almost €9.2 million, the Privatisation Agency considers that a new tender is the best solution for the company, its employees and the state.

The company JRB produced good business results in the previous year and increased its profit which makes it highly attractive for potential strategic investors therefore ignoring the performance of the company and the enormous difference in the price would not be socially and economically justifiable.

In order to avoid similar moves by potential buyers, the Privatisation Agency will demand a significantly larger amount in guarantees, up to €1 million, at the next tender for the sale of the company.