George Soros withdraws from planned sale of Serbia's largest drug maker Galenika

By bne IntelliNews June 5, 2015

US magnate George Soros has reportedly abandoned his interested in the privatisation of Serbia's largest drug maker, Galenika, after the government in Belgrade failed to send any reply to his offer 10 months after it was submitted, daily Blic reported on June 4, quoting unnamed sources.

As previously reported, private investment fund Quantum Strategic Partners Ltd. managed by Soros Fund Management LLC, sent a letter of interest in the sale of Galenika to Serbia's privatisation agency in October. Galenika is one of 526 state-owned firms whose privatisation was launched in mid-2014 in line with Serbia's new privatisation law aimed at completing a major public sector overhaul by the end of 2015.

According to a June 4 report, the Serbian government said that Soros had withdrawn from the privatisation process because of Galenika’s €220mn debts.

Yet Blic quotes an unnamed source as saying that the real reason for the withdrawal is that Soros received no response to his offer. According to the source, Quantum Strategic Partners was willing to buy Galenika’s assets and continue producing drugs. It also proposed a social programme for the surplus workers, but did not want to take over the debts.

Soros had offered €60mn-70mn for Galenika, according to unofficial information.

In response to the claims, officials from the economy ministry told Blic that the proposed privatisation model for Galenika by Soros’ investment fund was not in line with the privatisation law. The demand towards the state to cover the company’s commercial liabilities is not in line with Serbia’s fiscal consolidation programme, and at the same time would be against the country’s pledges towards international financial institutions.

The ministry stressed that Galenika’s total debt stood at €220mn at end-2013.

Last month Galenika opened a tender to seek a privatisation advisor. Under the government’s recent privatisation law amendments the deadline for it finding a strategic partner has been extended to end-May 2016 from end-2015.

According to earlier media reports, the privatisation agency has received between 10 and 15 letters of interest in Galenika in the earlier stage of the pending sale.

At the same time, Galenika managed to turn to profit in 2014, after posting losses in the previous four years as a result of shrinking production and mounting debt. In December, company officials reported a RSD320mn (€2.7mn) profit for the first 11 months of 2014 thanks to 30% higher output. In 2013 Galenika reported a net loss of €11mn.

Galenika once had a market share of 60% in the former Yugoslavian markets of 24mn people. Today, it controls only some 10% of the Serbian market of 7.1mn people. The company employs some 1,500 people.

Related Articles

PMs of Serbia and Kosovo clash at Western Balkan summit ceremonial dinner

Serbian Prime Minister Aleksandar Vucic reportedly confronted his Kosovan counterpart at the ceremonial dinner during the Western Balkan Summit, over Pristina’s decision to re-register ... more

US puts Albania, Bosnia and Serbia on blacklist of major money laundering countries

The US department of state has included Albania, Bosnia & Herzegovina and Serbia in its latest list of major ... more

27 companies submit bids for Belgrade airport concession

Serbia’s Minister of Construction, Transport and Infrastructure Zorana Mihajlovic announced on March 13 that 27 companies responded to Belgrade’s public call for a 25-year concession to operate ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss