PRIVATIZATION IN SERBIA

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PRIVATIZATION IN SERBIA
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Framework
LEGAL
INSTITUTIONAL

• Ministry of Economy
• Privatization Agency
• Share Fund

• Privatization Law
• Law on Privatization Agency
• Law on Share Fund

Laws

• Tender Sale
• Auction Sale
• Restructuring
• Valuation

Bylaws
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Privatization Concept
Objectives of privatization

• Liberal and open economy
• Clear ownership structure
• Private and state ownership
• Elimination of social ownership
• Foreign capital inflow
• Strong corporate governance and better management
• Post privatization restructuring of enterprises
• Efficiency improvement

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Privatization Concept (contd)
Privatization structure

• 70 of social capital sold to investor
• 30 workers and citizens
• In case of tender privatization up to 15 goes to
  workers and at least 15 to privatization
  register
• In case of auction privatization up to 30 can be
  distributed to workers

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Privatization flow
Initiative
Prospectus
Publication
Decision on method
Monitoring targets
Enterprise ?inistry Buyer
Basic information about entity being privatized
Preliminary Letters Of Interest
?ender ?uction Restructuring

• Investment program
• Social program
• Environmental
• protection program

Privatization Agency
Letter of Interest from potential investor is
sufficient for the initiation of the
privatization process.
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Tender Sequencing
Tender implementation
Advisers selection
Tender preparation
Closing
Invitation for EoIs from Financial and Legal
advisors
Due Diligence reports
Acquiring of tender documents
Payment of purchase price
Short List
Preparation of tender documentation
Due Diligence of the buyer
Closing
Request for Proposal
Bids reception and evaluation
Public Invitation to tender
Monitoring
Bids reception and evaluation
Negotiations
Negotiations
Signing of SPA
Agreement completion
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Auction preparation and implementation
Implementation and Conclusion
Preparation
Preparation of the Auction documentation
Registration of participants
Announcement of the public invitation
Auction
Application
Announcement of the successful purchaser
Closing
Site visit
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Capital Market
STOCK EXCHANGE TRADING
Subscription of shares certificate
Central securities register
Stock register
Stock exchange
Seller
Buyer
Broker
Broker
Share fund
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Selling price and Investments ratio

• Small No. of foreign buyers but huge ratio in
  selling price, investment and social program
• Foreign buyers are mostly multinational companies
  (Henkel, BAT, Lukoil, Philip Morris, Lafarge,
  Titan, Holcim)

• Public Tenders most attractive to foreign
  strategic investors
• Recently foreign investment funds mostly active
  on Stock Exchange

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Major Transactions
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Major Transactions (contd)
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Privatization results 2002. 2004. (in 000 EUR)
Results are updated on 31st of December, 2004
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Privatization plans for 2005

• Acceleration of privatization process
• Planned amendments to Privatization Law
• Conditional write off of debt of SOEs toward
  state and state owned companies
• Accent on vigorous selling of shares from Share
  fund portfolio
• Approximately shares of 600 companies left
• Energoprojekt Holding, Beograd (app. 20)
• Simpo, Vranje (app. 40)
• Hotel Moskva, Beograd (app. 40)
• Hotel Balkan, Beograd (app. 40)
• Finalization of restructuring process for
  significant number of largest economic systems in
  Serbia

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Privatization plans for 2005 (contd)

• Capital of at least 18 SOEs offered through
  public tender
• Road construction companies
• Transportation
• Nisekspres, Nis
• Litas, Pozarevac
• Autotransport, Kraljevo
• Services
• Janko Lisjak, Beograd
• Centrotekstil, Beograd
• Jugosped, Beograd
• Agriculture
• Labudnjaca, Vajska
• Aleksa Santic, Aleksa Santic
• Djuro Strugar, Kula
• Granicar, Gakovo,
• Mitrosrem, Sremska Mitrovica
• Elan, Srbobran

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Privatization plans for 2005 (contd)

• Public auctions for more than 300 SOEs will be
  held
• Road construction companies
• Transportation
• Agriculture

• Continuous trading of Share Fund packages
• Sale of shares through Belgrade Stock Exchange
• Capital of more than 200 companies to be offered

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Why Invest in SERBIA?

• High intrinsic value
• Poor management
• Lack of finance for capex and marketing
• Hidden reserves (liquid property)
• Good balance of qualification and cost of labor
• Easy access to regional markets
• Solid resource base (agribusiness)
• Solid growth prospects
• construction and engineering, food and beverages,
  home appliances

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More information available atwww.priv.yu
SOLD !!!

• Privatization Agency
• Terazije 23, 11000 Belgrade
• 381 11 30 20 800
• info_at_priv.yu