Serbia to sell 25% stake in pharmaceutical giant Galenika

Serbia to sell 25% stake in pharmaceutical giant Galenika
By bne IntelliNews April 5, 2016

The Serbian economy ministry launched a tender process for the sale of 25% of state-controlled pharmaceutical giant Galenika on April 4, setting the starting price at just €7mn.

Galenika was originally listed as one of 502 public companies supposed to be privatised by the end of 2015. However, it was among 17 companies of strategic state interest whose privatisation deadline has been extended by up to a year under amendments adopted by the Serbian parliament in May 2015 and approved by the International Monetary Fund (IMF). The IMF approved a precautionary €1.2bn three-year stand-by arrangement (SBA) in February 2015 which envisages privatisation or restructuring of state-owned companies, including Galenika.

The call for tender was published in Politka daily and says that prospective strategic partners need to submit their applications for participation in the tender and pay a deposit of €100,000 no later than May 4.

Potential strategic partners also need to be a legal entity whose controlling owner, or members of the consortium jointly, posted an operating income of at least €50mn or assets amounting to no less than €100mn in the previous financial year - 2015.

Any potential strategic partner of Galenika needs to have at least five experts with at least 10 years experience, of which at least five were in high level managerial positions within pharmaceutical companies, to manage Galaneka for the duration of the strategic partnership.

The government currently owns a 70% stake in the company, while 15% belongs to the Equity Fund and the remaining 15% to other shareholders.

Tanjug quoted economy minister Zeljko Sertic as saying earlier that simultaneously with the tender process, the company’s accumulated debts should be managed.

“Debts are a serious burden,” Sertic said.

Of Galenika's total debt which amounted to $220mn, it owes $50mn to commercial banks with which it is difficult to negotiate, Sertic said.

Besides huge financial debts, Galenika struggled under allegedly corrupt management for years. Efforts to tackle this problem finally started in April 2014 when Serbian police arrested several of Galenika's former managers, accusing them of abuse of office and siphoning off money from the company. Most were members of the Socialist Party of Serbia (SPS), which has been a minority coalition partner or supporter of all Serbian governments since 2004. Both the tax authorities and the police brought charges against the former managers, alleging they caused some €75mn damage to Galenika, which benefitted local drug trader Velefarm. The process is still ongoing.

Galenika once had a market share of 60% in the former Yugoslavian markets of 24mn people. Nowadays, it controls only some 10% of the Serbian market of 7.1mn people but still employs 1,400 people.

Related Articles

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

China's Hesteel Group to boost investments in Serbia’s Smederevo steel mill

Representatives of China's Hesteel Group, which acquired Serbia’s only steel mill Zelezara Smederevo in July 2016, plan to invest ... more

French court refuses to extradite ex-Kosovo PM Haradinaj to Serbia

The Court of Appeals in the French town of Colmar decided on April 27 not to extradite Kosovo’s former Prime Minister Ramush Haradinaj to Serbia.  The decision was celebrated in Kosovo and ... 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