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Serbia delays sale of state-run companies until after election

Government

Serbia will delay the sale of state-run companies including the Naftna Industrija Srbije (NIS), the country's largest petroleum producer and distributor, until after general elections that may be held in December. Sales „including the privatization of the NIS will be halted,” Serbian Finance Minister Mladjan Dinkic said yesterday on Belgrade's private Radio B92. „The break is a temporary one, particularly because of a constitutional referendum and election campaign.” The election will follow the October 28-29 referendum on a new Serbian constitution, which was approved by parliament earlier this month. The country must change its charter and hold general elections as a result of its peaceful breakup with Montenegro in May. A date for the election hasn't been set.

The sale of NIS was a condition set by the International Monetary Fund for backing Serbia's transition to a market economy after decades of communism, wars and international isolation under former President Slobodan Milosevic. Dinkic said he was convinced the new Serbian government „will be able to complete the privatization” because the strategy for such a move is already in place. Earlier this year, Serbia named a group led by Merrill Lynch & Co. and Raiffeisen Investment to help in the NIS sale. This month, the Serbian Agency for Privatization launched a tender aimed at selling 25% of the oil producer. Several international companies have expressed interest in taking a stake in NIS, including Hungary's Mol Nyrt, OMV AG of Austria and Hellenic Petroleum SA of Greece. (Bloomberg)

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