Two-phased NIS privatization

Two-phased NIS privatization

Bubalo said the minority package will be sold to a strategic partner alongside an obligation to conduct added capitalization, which will then create the conditions for small shareholders to sell their shares on the market. This phase, projected to last three years, will allow the strategic partner to acquire 49 % of NIS capital at most.

The Serbian government plans to sell the majority package in the second phase, which will allow the strategic partner managing control, while the state, relinquishing its dominance, will still be able to protect its interest by a golden share or a veto.

Bubalo said several regional companies have so far expressed interest in NIS, including OMV, MOL, Hellenic Petroleum, PKN Orleon, Motor Oil, Petrol, and the Russian Lukoil. Preliminary talks have already been held with the said companies. According to the information available so far, the government is inclined to offer 34 % on a tender, while former and present NIS workers would own 8 % of stock.

‘The government wishes to see global companies express an interest’, Bubalo said, adding it was to be expected that regional leaders in the industry would be interested first. Kori Udovički, former Energy minister and Center for high economic studies chairwoman, believes that prior to privatization, NIS should lose the monopoly status it now enjoys as the only oil importer.

‘NIS earns € 300 million a year using its monopoly status and that will be transferred to the future buyer. Unless we intend to introduce competition and concessions, we better not privatize at all’. Udovički said.

Regionally, nine out of ten oil companies have been privatized using the model allowing the strategic partner to initially buy the minority package, acquiring full control after three to ten years. The state is the majority owner only in Croatia’s INA.