BELGRADE – Serbia’s oil monopoly NIS said yesterday it was looking for some $800 million in bank loans to upgrade its two refineries and boost assets before launching a privatization process. «We are currently examining the capacity and interest among banks in Serbia to participate with $200 to $300 million,» said NIS General Manager Zeljko Popovic. «Banks abroad are also interested in granting us a pre-privatization loan of up to $500 million.» NIS would also contribute some $200 to 300 million from its profits, bringing the cost of the plan to around $1 billion. Some $700 million of that is needed to upgrade refineries in Pancevo and Novi Sad, damaged by NATO bombs in 1999. NIS’s first ever audited report for 2004 showed net book value at $894.25 million and total assets at $1.6 billion. Talking to a round table on NIS reform, Popovic said NIS would make a formal loan request to banks in about three months, when a government-picked privatization adviser was due to unveil a plan to reform the sector. No adviser has been hired yet. But the banking sector may not be as responsive as NIS hopes, said Bozidar Djelic, chair of Credit Agricole’s operations in Serbia and Southeast Europe. «State-held NIS seeks a commercial loan. There will be no commercial loans against sovereign guarantees. We may talk business only when NIS clearly commits to privatization and to selling its stake to a strategic partner.» Staged privatization NIS wants whoever is picked as adviser to accept its plan to «first upgrade, then privatize» over two years. It would be in the firm’s best interest because «every $100 million invested in NIS would boost assets by $300 million,» Popovic said. The plan contradicts Serbia’s pledge to the International Monetary Fund to sell control of the refineries to a single buyer. The government made the promise in May to win a six-month extension to its 2002-2005 loan deal with the lender. But the IMF seems to have endorsed the change of course, telling Serbia’s central bank earlier this week that Belgrade had made progress in the NIS privatization plan. NIS wants the state to first sell off a 25 percent stake, with an IPO for a 15 percent stake following at a later date. NIS workers will get 15 percent free of charge. It hopes to attract a group rather than a single investor, with the state always keeping a golden share. Stakes purchased by investors would also include a share in NIS’s upstream operations, Popovic said.