By Ivana Sekularac - Reuters
BELGRADE – Serbian state oil monopoly NIS, due to go on sale next year, on Tuesday posted a threefold increase in profits for 2006 and announced plans for major upgrades in its refineries in 2007.
The company said its profits hit 6.6 billion dinars (around –84.2 million), up from 2.2 billion dinars last year, when it restructured and cut its work force.Zeljko Popovic, head of the managing board, told Tanjug news agency that in 2007 the company would invest some –260 million mainly to upgrade its two refineries in Pancevo, near Belgrade, and in the northern town of Novi Sad.
The funds would come from this year’s profits and from bank loans, Popovic said. A total of over –800 million would be invested in such projects by end-2009 to harmonize operations with EU standards on product quality and environment protection.
Officials said a tender for a 25 percent stake in NIS is expected in early 2007, after plans to sell the company by end-06 were scrapped when the government called early elections for January 21.“There is an ongoing preparation of the tender documentation as regards the legal, financial, investment, ecological and other aspects,” Srdjan Bosnjakovic, NIS general director, said in a statement. “The advisers are recommending a phased approach to the privatization.”
Privatization advisers Merrill Lynch and Raiffeisen Investment have had meetings with companies including Hellenic Petroleum, OMV, MOL, PKN Orlen and Lukoil.Belgrade expects to get at least $300 million for the stake.The outgoing government has proposed the buyer would get another 12.5 percent through a $250 million capital increase and be required to invest a further $250 million over three years.At the end of the first phase of the privatization, both state and buyer would each hold 37.5 percent, with the rest being reserved for state-run pension funds. The buyer would get management control, while Serbia gets to veto key decisions.
The second phase of the privatization sees NIS launching an initial public offering (IPO) and selling 15 percent of its total capital. The initial buyer would have the option to boost their holding to a maximum of 49 percent, either by buying from small shareholders or from the government.
(KATHIMERINI - REUTERS, 28/12/2006)