ECONOMY

Serbia sells off cement plants

BELGRADE – Serbia yesterday picked France’s Lafarge, Swiss Holcim and Greek Titan Cement as buyers of majority stakes in three cement plants with a total annual capacity of 3.1 million tons. In its first major privatization since last year’s ouster of Slobodan Milosevic, the Serbian government in October launched an international tender for 70-percent stakes in each of the Beocin, Novi Popovac and Kosjeric cement plants. Lafarge is to pay $50.89 million for its 70-percent stake in Beocin, Holcim $52.5 million for the Novi Popovac stake and Titan Cement $35.5 million for Kosjeric, Privatization Minister Aleksandar Vlahovic told a news conference. In addition, Lafarge would take over debt of $19.6 million, Holcim of $36.6 million and Titan of $1.079 million, he said. A total of $14 million of these liabilities was Beocin and Novi Popovac’s debt to the Paris Club of sovereign creditors who granted a phased 66-percent write-off of Yugoslavia’s $4.5 billion debt last month. The remainder will be repaid over 22 years with a six-year grace period. Speaking only 15 minutes after a government commission picked the best bidders, Vlahovic said the buyers would immediately pay for the entire debt of both firms. Negotiations on technical details will start on January 2 and agreements will be signed within 30 days, he said. «The buyers are known and we won’t discuss the price but guarantee and indemnification details. Guarantees for promised investments are our primary concern,» Vlahovic said. Lafarge’s offer for investing in Beocin was $32.26 million, Titan’s offer for Kosjeric was $29.68 million and Holcim’s proposed investment in Novi Popovac was $83.9 million, the minister said. Five-year investment plans are backed by detailed technical documentation and Vlahovic said he expected no problems. The Serbian privatization scheme is part of reforms agreed to with the International Monetary Fund. Under the reform agenda with the IMF, Serbia was due to complete at least one major privatization in 2001. Serbia said it counted on some $160 million in privatization receipts for its 2002 budget. The Privatization Ministry plans to sell dozens of companies next year. «With these privatizations, Serbia will secure $138.9 million in direct receipts for the budget. (Finance Minister Bozidar) Djelic will have to soon admit that he had underestimated privatization receipts for 2002,» Vlahovic said. «The core issue for enterprises is whether they can approach the realities of competition, that is, flexibility, fundamentals, innovation, etc. Personally, I am not concerned. The group is a strong leader and market shares have hit the ceiling in certain branches.»