Bosnia to put stake in drug producer Bosnalijek up for sale

Bosnia to put stake in drug producer Bosnalijek up for sale
By Denitsa Koseva in Sofia March 10, 2016

The government of Bosnia & Herzegovina’s bigger entity, the Muslim-Croat Federation, has decided to launch the sale of its stake in blue chip pharmaceuticals producer Bosnalijek.

The company has been included in the entity’s privatisation lists since 2010. Back then, the Federation’s government opened a tender for the sale of the stake, but had to cancel the tender due to lack of interest.

The 19.26% state stake will be offered on the Sarajevo Stock Exchange, where the company’s shares are traded, the government said in a statement following its regular session on March 10.

In 2010, US pharmaceutical company Alvogen wanted to buy the stake and was  also interested in acquiring stakes held by other shareholders. However, no agreement was reached as the government decided to postpone the launch of a new tender after new potential buyers from Libya, the UAE, Poland, Germany, Slovenia and Croatia reportedly appeared.

According to bourse information, Luxemburg-based firm Haden SA was the largest single shareholder in Bosnalijek with a 29.95% stake at end-June 2015. It was followed by the energy ministry of Bosnia’s Federation with 19.25% and Tripoli-based Economic and Social Development Fund with 8.78%. Haden first entered Bosnalijek in September 2012 when it bought the 8.37% stake of the World Bank’s IFC.

Bosnalijek’s net profit increased by 33.5% y/y to BAM4.3mn (€2.2mn) in the first nine months of 2015, according to the latest available data. Operating revenues went down 8.4% y/y to BAM76.75mn, while operating costs declined by 8.9% y/y to BAM70.3mn. Bosnalijek’s assets rose 1.7% y/y to BAM212.9mn in January-September. The company

In January, the Federation’s government announced its 2016 privatisation plan. It included the launch of sale of its stakes in some of the biggest companies in the country – the telecoms operator BH Telekom, Bosnalijek and the aluminium smelter Aluminij, along with petrol firm Energopetrol, engineering firm Energoinvest, tobacco maker Fabrika Duhana Sarajevo, insurer Sarajevo Osiguranje, Energoinvest Comet and the state stake in ArcelorMittal Zenica. Most of these companies were included in the entity’s privatization plans for 2014 and 2015 as well, but no tender has been called.

Bosnalijek was founded in 1951, and as of end 2012 employed 673 people. Exports have increased by 14.6 times, according to the company’s website. It exports mainly countries in the western Balkans and the CIS.