ECONOMY

Serbia allows Hellenic Sugar to continue bid

BELGRADE – Serbia told its Crvenka sugar refinery yesterday to resume talks on a takeover by Greece’s Hellenic Sugar Industry after an investigation found the privatization process had not been violated. Hellenic was the only bidder in a tender, offering 11.9 million euros ($11.8 million) for a 70 percent stake in the plant. Cvrenka workers rejected the bid, saying Hellenic had not specified the size of staff redundancy packages. On October 22, the Privatization Ministry gave a 48-hour deadline to Crvenka’s workers and managers to submit evidence that the legal procedure had been violated. Privatization Minister Aleksandar Vlahovic told a news conference yesterday that an investigation found no failures that would have caused «material consequences.» «Therefore, the ministry ordered the negotiating commission to resume talks with the potential buyer, Hellenic Sugar Industry, with the aim of finalizing an agreement and specifying liabilities of the buyer as per social and investment program,» he said. The Greek company had agreed to pay around 2 million euros for the stake, invest an additional 7.8 million euros and provide 2.1 million euros for a social program. Talks should be completed within the next 10 days. The government also said Hellenic, not its recently established subsidiary Balkan Sugar Company, should sign the contract, under which Hellenic would not be able to sell a majority stake in Crvenka for the next five years. Hellenic would also have to keep all the workers for the next five years. It promised a 5 percent annual salary increase starting from 2003. Crvenka is one of five sugar refineries, with a combined annual capacity of 200,000 tons a year, that the government put on sale in June. Asked what would happen if the workers still objected to the deal, Vlahovic said: «From what we heard from workers, there is a difference between the information they had and the information in the offer. «But if they do refuse, we will impose emergency measures on the plant. We are telling them to sign the contract with Hellenic Sugar,» he added. Should Hellenic for some reason drop its bid, the tender for Crvenka would be annulled, he said. Addressing a separate business forum, Vlahovic agreed with business managers that trade unions’ expanding «wish-lists» to potential buyers were deterring investors. To appease foreign investors, the government has considered a possibility of cutting the five-year period during which new owners have to keep all the workers, he said. «Investors will in that case have a liability to keep all the workers for one year, after which a transition fund will take over any care for redundant workers,» Vlahovic said.