Serbia exclusive report: Sale or privatization of Energy company EPS, strategy or teaser from new PM?12. May 2014. / News Serbia Energy
Privatization of a minority part of the Electric Power Utility could be performed by the introduction of foreign partners in the construction of new power plants. Aleksandar Vucic, the Serbian Prime Minister, has surprised many by his addressing in his exposé “this is the most valuable public company which is owned by the state, but the state receives small revenue from it.”
Djerdap 1 will never be a private hydroelectric power plant.
“Strategically it is not a good solution for Serbia to sell a majority package of shares of EPS. The best option would be entering of a minority partner by the end of the next year (one of the leading companies in the energy industry). That partner would choose a majority of management of EPS and it would increase business efficiency. The state would gain more profit from EPS’s operations and would enhance the value of the company in case if it later decides on privatization or listing on the stock exchange. This process (the entering of minority shareholders) is possible to be completed during 2015 and 2016. ”
Is it necessary to privatize EPS, even its small part?
The informed say there is nothing that the foreign nor domestic partner can do, the EPS would be best to let it be led by the market principles. This means that a public company the EPS turns into a joint stock company and its policies will not be longer the one to dictate the price of electricity and preserve social peace.
The reason that EPS should remain state owned is the fact that it is the most valuable company, which still Serbia has, besides “Telekom”. But what will happen if the state stays without it as well?
Privatization may be the best solution for the company, but for the state is not, says a source familiar with this issue, close to the EPS, because the state will no longer be able to make decisions about the business (especially since a new minority owner it leaves the right to choose directors) for what gets more money during the sale.
There is an excellent example of NIS whose privatization save the company from bankrupt, but therefore every seven to 10 days the boss by himself changes the price at the pumps, not waiting for the state’s green light.
When asked if it is realistic to expect that a local company, which is engaged in electricity trade could buy a minority share of EPS, the same source says he doesn’t believe that any of them have so much money.
If the state has already decided to sell a part of this enterprise, it would be desirable to be an energy company; in that case, the state besides money would also receive knowledge as well. The sale of Montenegrin Electric Power Utility could be taken as an example of fair privatization, by which some of the money received from the Italians has been given to the budget and some to the company, the source said.
The worst scenario would be a partial sale of EPS, as Bulgaria or Macedonia did. If Serbia would sold distribution or hydropower plants that would be disastrous for the future functioning of the EPS, says the source.
On the contrary, Milan Djordjevic, president of the Trade Union of Workers of EPS says that privatization would be good for the country, but not for the citizens, because the price of electricity would have to be significantly increased, and the power outages would be much, much more rigorous.
“ The EPS has good enough domestic management to make profits and operating by itself successfully. Only it is needed, the EPS to change its modality and from a public company turns into a joint stock company, the politics to withdraw from EPS. Even with this price of electricity, but without political interference, the EPS would be a leader company but they have to force everyone in the chain to pay the debts to this public company,” he said.
On the eve of the elections, the Prime Minister was told by Djordjevic, to consider well what if would happened a privatization of EPS, because “the Prime Minister without EPS, becomes a president of a local community”.
This trade unionist believes that during the Prime Minister’s speech, primarily, he meant that a strategic partner should be introduced in termination of TENT B3, in order to help completing the entire job, together with the pit Radljevo, so there is no word about the sale of part of EPS, which would the worst possible option for the company.
Source; Serbia Energy
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