Privatization process update

Privatization process update

Economy privatization minister Predrag Bubalo announced that the privatization of public-owned companies should be finalized, with the remaining 1,000 companies to be put on sale. Estimates show that one third of that number will be declared bankrupt.

There is no official assessment concerning the number of companies to be privatized, as well as those to be declared insolvent. Public-owned companies which fail to find a new owner by means of selling 70 percent of social equity by the end of 2007 will be declared bankrupt by default.

Experts point out the difficulty of assessing how many companies will be privatized through selling, and how many through bankruptcies. In any case, the Privatization Bill has been amended so that debts can be partially written off and companies reconstructed, thus facilitating the privatization process for all.

Bankruptcy ensues only after two auctions and two tenders fail to produce results, added Bubalo, claiming that the privatization is the best remedy for healing social equity.

Privatization through bankruptcy, introduced in 2004, will not be used as a model for privatizing socially and state-owned companies, but primarily imposed on insolvent companies, regardless of their ownership status.

International Monetary Fund and World Bank also insist on speeding up the privatization through efficient bankruptcy procedure.

Some experts think that one way to impose financial discipline is to force bankruptcy on companies that evade paying taxes.