NIS – Jugopetrol to borrow €282 mln to modernize installations

In an interview, NIS General Director Sran Bofinjakovi said that the state-owned oil company was in need of a loan, owing to the delay of the privatization process, which caused the shift of planned investments that should have been secured via recapitalization.

„We are talking about the loan potential NIS needs to achieve in order to meet the requirements set by the privatization advisor, solve environmental issues and improve quality of products in 2009 to be in line with the European standards.” The €282 million loan will be supplemented with another of €90 million to substitute the funds that should have been gained through recapitalization.

The majority of the sum will be spent on the refineries that have not seen any investments for the past 15 years. Bofinjakovi said he hoped that the review of the privatization process suspended in 2006 would be carried out by the end of July to allow for the resumption of the procedure. In his opinion, a tender for the sale of NIS will in all likelihood be called in September or October.

Speaking about the possibility that NIS might be listed on the stock exchange, he said it depended on the government policy, stressing that such a move would not coincide with the privatization model that is currently considered. Bofinjakovi denied that NIS is a monopoly on the Serbian oil market, noting that 35% of 1,300 gas stations in Serbia belonged to the company.

“Even though other major foreign oil companies operating in Serbia have fewer stations than NIS, owing to the location and modern equipment they pull in more money than we do,” Bofinjakovi explained. (petrolplaza)