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The Government of the Republic of Serbia

In the service of citizens

Contract with Azov Impeks terminated

Belgrade, 14 January 2010

At the initiative of the Ministry of Economy and Regional Development, government representatives held a meeting today with the representatives of the trade union, executive board and owners of the company Kraljevo Wagon Factory to assess whether the demands of the company’s strike committee, which were defined on December 15, 2009, have been met.

According to the statement issued by the Ministry, it was concluded at the meeting that the owner, Azov Impeks from Ukraine, has not met with a single demand of the strike committee. The committee demanded that a certain portion of overdue salaries should be paid to workers by December 31, 2009, that the dynamics of the payment of remaining overdue salaries should be established and that the payment of benefits for 2006 should be harmonised.

Since none of the demands have been fulfilled, or obligations from the sale contract, which imply the realisation of social welfare and investment programmes, the Ministry of Economy and Regional Development proposed that the Privatisation Agency terminates the sale contract with Azov Impex.

The Privatisation Agency today decided to terminate the contract with the buyer due to their failure to fulfil obligations for the second and third years totalling €2.7 million and for neglecting the social welfare programme and their obligations toward the employees.

It also decided to collect bank guarantees and contractual penalties, the statement adds.