EPS to get "indirect moral support", but no money

Serbia's power monopoly EPS, who on Wednesday raised the alarm saying that they might face bankruptcy, will not be receiving any money from the state.

Izvor: Beta

Thursday, 07.02.2013.

13:25

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BELGRADE Serbia's power monopoly EPS, who on Wednesday raised the alarm saying that they might face bankruptcy, will not be receiving any money from the state. No funds will be set aside from the budget for that purpose in the future either, explained Minister of Economy and Finance Mladjan Dinkic, and added that the company "does not need them, either". EPS to get "indirect moral support", but no money EPS said yesterday that they "urgently needed a EUR 300mn loan in order to avoid bankruptcy" which could happen "as early as in March or April". The company said that they had no money for regular payments to creditors, and that the loan would be used for that purpose. But Dinkic told reporters on Thursday that EPS can count only on "indirect moral support" from the state, while "everything else is in their hands". "EPS must first help themselves, because there are possibilities to use their own reserves and their own reconstruction activities to create a stable company," the minister stated, and added that the state would not give loan guarantees to any public company, unless the money was meant for development activities or new investments. As far as daily business activities are concerned, "each public company must find inside reserves and make inner reforms", concluded Dinkic. IZIT institute associate Sasa Djogovic commented on the situation on Thursday to say that EPS "would not go bankrupt", but that he believed the government would have to act urgently and help the company. According to him, the millions of debt accumulated by EPS came via inefficient business practices that kept electricity prices "low" - for the sake of preserving "social peace". Djogovic thinks that the government will react, because EPS represents an "artery of the economy", and that a solution for its problems would be a hike of electricity prices - until they are brought "within the market framework". Beta Tanjug

EPS to get "indirect moral support", but no money

EPS said yesterday that they "urgently needed a EUR 300mn loan in order to avoid bankruptcy" which could happen "as early as in March or April". The company said that they had no money for regular payments to creditors, and that the loan would be used for that purpose.

But Dinkić told reporters on Thursday that EPS can count only on "indirect moral support" from the state, while "everything else is in their hands".

"EPS must first help themselves, because there are possibilities to use their own reserves and their own reconstruction activities to create a stable company," the minister stated, and added that the state would not give loan guarantees to any public company, unless the money was meant for development activities or new investments.

As far as daily business activities are concerned, "each public company must find inside reserves and make inner reforms", concluded Dinkić.

IZIT institute associate Saša Đogović commented on the situation on Thursday to say that EPS "would not go bankrupt", but that he believed the government would have to act urgently and help the company.

According to him, the millions of debt accumulated by EPS came via inefficient business practices that kept electricity prices "low" - for the sake of preserving "social peace".

Đogović thinks that the government will react, because EPS represents an "artery of the economy", and that a solution for its problems would be a hike of electricity prices - until they are brought "within the market framework".

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