“State could assume Jat debt to lure investor”

Serbia is considering ways to make loss-making national carrier JAT Airways attractive to investors, Prime Minister Mirko Cvetkovic told Reuters. He said that Serbia is thinking about taking on Jat’s debt and paying for redundancies. “State could assume Jat debt to lure investor” Cvetkovic said “the current situation at JAT was so dire that not only will no one give you a single penny, but you will have to pay someone to come in." Reuters reminds that Serbia has long sought to find a buyer or partner for JAT and, earlier this week, the government said it would launch a tender next month to find a partner to revive JAT. “Cvetkovic said the plan under discussion was modeled after that used recently to sell Greece's Olympic Airlines,” Reuters said. "This model basically is that you are creating a new core and the new core is (taking over) the activity of the existing company while the government takes care of the redundant workers and the asset of the existing companies and obviously the credit," Cvetkovic told the news agency. "If we are paying, which we will probably have to do, then why don't we start at the very beginning and (with) this payment ... resolve the inherited problems in the area of creditors and redundant people,” he continued. Serbia, which is JAT's largest creditor, is seeking a partner to take a 51 percent stake, although any carrier not party to the open skies agreement could get a 49 percent stake and Serbia would sell off another two percent to another firm to retain only a minority stake, Cvetkovic told Reuters. The agency reminds that earlier this month, JAT announced a EUR 16.5mn loss for 2009. It said it planned to borrow 51.5 million to restructure and renew its ageing fleet and prepare for a potential partnership with Turkish flag carrier Turkish Airlines which has not yet made any decisions. Mirko Cvetkovic (FoNet archive)

“State could assume Jat debt to lure investor”

Cvetković said “the current situation at JAT was so dire that not only will no one give you a single penny, but you will have to pay someone to come in."

Reuters reminds that Serbia has long sought to find a buyer or partner for JAT and, earlier this week, the government said it would launch a tender next month to find a partner to revive JAT.

“Cvetković said the plan under discussion was modeled after that used recently to sell Greece's Olympic Airlines,” Reuters said.

"This model basically is that you are creating a new core and the new core is (taking over) the activity of the existing company while the government takes care of the redundant workers and the asset of the existing companies and obviously the credit," Cvetković told the news agency.

"If we are paying, which we will probably have to do, then why don't we start at the very beginning and (with) this payment ... resolve the inherited problems in the area of creditors and redundant people,” he continued.

Serbia, which is JAT's largest creditor, is seeking a partner to take a 51 percent stake, although any carrier not party to the open skies agreement could get a 49 percent stake and Serbia would sell off another two percent to another firm to retain only a minority stake, Cvetković told Reuters.

The agency reminds that earlier this month, JAT announced a EUR 16.5mn loss for 2009. It said it planned to borrow 51.5 million to restructure and renew its ageing fleet and prepare for a potential partnership with Turkish flag carrier Turkish Airlines which has not yet made any decisions.