Serbia orders state utility "restructure or die"

By bne IntelliNews February 8, 2013

bne -

Serbian Finance Minister Mladjan Dinkic told state-run power monopoly EPS on February 7 to restructure or face bankruptcy, reiterating that Belgrade refuses to bail the company out. EPS claims it is weighed down by absorbing state enforced tariff subsidies.

"The government can offer EPS only indirect moral support ... EPS must first help itself as it has capabilities to be stable with its own resources and activities on restructuring," Dinkic said, according to Reuters.

EPS says it is owed RSD120bn (€1.07bn) by customers, and blames losses of RSD33bn last year on absorbing the cost of subsidised tariffs. On February 6, EPS officials warned the utility could face bankruptcy in March or April unless it secures an emergency loan by the end of next month to meet immediate funding needs and extend debt maturities.

The finance minister, in the midst of attempting to unfreeze a bailout loan from the International Monetary Fund by reducing spending, insists EPS must stand on its own two feet, even if he apparently sees little chance that it could recoup the money its owed by consumers.

"EPS must first help itself as it has capabilities to be stable with its own resources and activities on restructuring," he said. "EPS could get rescued if, by some magic, citizens and industry decide to pay their bills but such a scenario is quite unlikely." The finance minister also said that concessions on government policy have reopened the way for new talks with the IMF.

Speakin to Tanjug, the official added that the government would not approve guarantees for a €300m loan to EPS. "The government will not approve loan guarantees for any state-run company, unless the borrowing is needed for development or new investments," Dinkic said.

Related Articles

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more

EU, Western Balkans leaders agree action plan for refugee crisis

bne IntelliNews - Leaders of EU member states and Southeast European countries on the main ... 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