bne IntelliNews -
The Serbian government will try to save 16 key state-owned companies that being restructured and hopes to receive a one-year waiver from the International Monetary Fund (IMF) to do so, Prime Minister Aleksandar Vucic said on May 7 as quoted by news agency Tanjug.
Vucic’s statement comes the day after he admitted he has not asked the visiting IMF mission to allow an extension of the court protection of troubled state-owned companies from their creditors. This option had been proposed by Economy Minister Zeljko Sertic for the 25 companies of the greatest importance for the state. Instead, Vucic said on May 6 he had accepted the IMF's proposal to hold individual talks with the creditors of each of the 25 firms.
However, on May 7, he told a conference organised by the council of foreign investors in Serbia that the government will actually seek the extension for the 16 firms that employ the largest number of people.
"We will try to save them even earlier but will still give ourselves a period of one year," Vucic said.
Vucic said that the 16 companies include those in the chemicals sector (probably referring to petrochemicals producer HIP-Petrohemija), hydraulic and pneumatic equipment manufacturer Prva Petoletka, which has attracted the interest of German and Italian investors, bus and truck manufacturer FAP (which could be acquired by Finland’s Sisu Auto by end-May) and furniture maker Simpo.
Under the current law, companies under restructuring in Serbia will no longer be protected from their creditors launching forced claims payment after June 1. This is now a looming problem as the government is facing many challenges in implementing the privatisation process of 512 state companies.
As a result, most are expected to go bankrupt once creditors start trying to recover their money after the end of May. Therefore the government is trying to prevent the imminent collapse of at least the most important companies.
Serbia planned to sell or shut down the firms slated for privatisation by the end of 2015, but it now seems increasingly likely that this deadline will not be met for most of the companies.
The head of the privatisation agency, Ljubomir Subara, said on May 7 that the IMF is right to point to the delay in the privatisation of the 512 Serbian companies. According to Subara, the biggest culprits are the managers and state representatives in these companies who will, as he says, lose their influential seats once the privatisation of their firms is wrapped up.
The largest number of these 512 firms will end up in bankruptcy and only a small number will manage to find buyers, Subara said as quoted by Tanjug.
He added that in January Serbia was not ready to launch the privatisation of 33 firms as agreed wth the World Bank, which is providing advisory and financial support for the ongoing reform. Therefore, the agency started the sale of only four companies in January and a further 10 in the following months. It now hopes to open the sales process of another 10-15 companies in May, Subara concluded.
Serbia adopted an action plan for the bankruptcy of 188 of the firms in January, saying they had failed to attract any interested buyers. Economy Minister Zeljko Sertic said earlier in May that the bankruptcy procedure looks realistic for another 100-150 firms, adding the fate of all 338 companies will be decided by June 1.
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