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According to a June 4 report, the Serbian government said that Soros had withdrawn from the privatisation process because of Galenika’s €220mn debts.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