EBRD Welcomes Serbian Move to Privatise Galenika

Daniel Berg, Director for Serbia at the European Bank for Reconstruction and Development, EBRD, told BIRN that the Serbian government decision to swap the company's debts for equity would seem to have cleared one concern that investors may have about investing in a company with excessive financial liabilities.

EBRD will welcome private ownership and would be interested in exploring the financing opportunities once a decision is made about privatisation, Berg said.

"EBRD does have experience working in the pharma sector, both with domestic and international partners, and we would bring our knowledge and experiences to support a new investor," Berg said.

"We look forward to the next steps in the privatisation process and remain ready to consider financing for new investors as a financial and operational structure is being put in place," Berg added.

On August 14, Zoran Pantelic, head of the trade union at Galenika, told the Serbian news agency Tajug that the government and the state-owned company Srbijagas had taken over 14.7 billion dinars (€123 million) worth of company liabilities in exchange for an 8 per cent stake, in a move to prepare the way for another privatisation attempt.

Galenika is among the largest loss-making state-owned enterprises in Serbia whose privatisation the IMF has encouraged under a stand-by agreement with the Serbian government. Previous efforts to privatise the company failed due to the huge debts and disagreements with trade unions.

Following the debt for equity swap, the government owns approximately 93 per cent of the company. The remaining 7 per cent is owned by employees' unions.

Galenika still owes 71  million euros to the banks and has 120 million euros worth of receivables from retailers,...