Serbian companies “Lasta”, “Luka Novi Sad” on sale

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SOURCENovosti
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BELGRADE – In the jurisdiction of the Ministry of Economy remained 174 companies, but only few of them are attractive enough for privatization. By the end of the year 13 of them should be put to sale, and among them will be “Lasta” and “Luka Novi Sad”. In the next round of privatization, experts estimate that spas and public companies will be put to sale.

The Ministry of Economy explained that among the important subjects of privatization are also “Galenika”, RTB “Bor Group”, “PKB Corporation”, “Petrohemija”, “Simpo” and “Slavija hotels”. The Government should make the decision on negotiations with the only candidate who remained in the race for strategic partnership with “Galenika”. It is a British-Russian consortium “Frontier-Petrovaks”.

“The Government will be able to make a final decision on ‘Galenika’ after completion of the negotiations when they will definitely know if the strategic partner is found or not,” explained the Ministry. “Privatization of public enterprises should be approached with special caution. Final decision on this is preceded with detailed analysis of the positive and negative aspects. All companies in the privatization portfolio now operate under market conditions and must settle their obligations to creditors. Also, except ‘Resavica’, none of the companies receive any state aid.”

Economists, however, do not expect significant revenues from companies that have for years enjoyed state protection. So far there was not much success in search of their new owners.

“Of all the companies that have been in restructuring, hardly any would sell, even if it was given for free,” said Ljubomir Madzar, professor at the Faculty of Economics. “Those companies are very indebted. Companies are not only buildings and equipment, but also the balance sheet. If debts are greater than assets, than these are problematic enterprises.”

Last year the state, by selecting a consultant for the sale, seriously began to prepare privatization of spas. There are ten of them in the Ministry’s portfolio. Based on the joint proposal of the Ministry of Health and Ministry of Labor, Employment, Veteran and Social Affairs, privatization of three of them is in plan – “Gejzer”, “Vranjske Banje” and “Bujanovac”. All of them, however, are in dispute. Pension Fund and state determine before the court how much to whom belongs, so there will be no sale without their agreement. On the other hand, EPS began to index the assets, although their response that this does not mean sale.

“Spas might be sold first because they do not have such a big impact on the standard of citizens,” said professor Madzar, saying that they could be sold even before public enterprises.

Madzar added that the idea of selling EPS has existed for a long time, but that he does not believe it will happen in the foreseeable future.

“Seeling EPS would mean an increase in electricity prices, which certainly is not popular for any politician,” said Madzar.

The last time the Law on Privatization was changed, there was a total of 526 companies that employ 90,000 workers with no private owner. Since then 236 enterprises has entered the bankruptcy proceedings, sales procedure was suspended for 71, and 43 were “fostered”. In 174 unsold work 53,000 people.

“Of the 500, 174 enterprises remained under our jurisdiction. The Agency for licensing bankruptcy administrators lists about 700 companies and there will be more in the coming years. Bankruptcy is the most efficient way for these assets to get a new owner,” said Dragan Stevanovic, state secretary in the Ministry of Economy.

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