The state is looking for a strategic partner for Petrohemija - Public call for recapitalization of EUR 150 million announced

The Ministry of Economy today announced a public call for the selection of a strategic investor for Petrohemija Pancevo with a recapitalization in the amount of EUR 150 million.

As stated in the text of the call, the capital structure of Petrohemija consists of the state's share that amounts to 75.25%, NIS Novi Sad 20.85%, Lukoil 3.08%, Akcionarski fond AD Belgrade 0.58% and Beogradska Banka AD Belgrade 0, 20%.

As per the text, the strategic investor can be a domestic or foreign legal entity, whereas the participation of a consortium or associated entities is not allowed in the privatization procedure.

All interested persons wishing to participate in the privatization process are required to pay a deposit of EUR 1m, and the deadline for applications is October 11. You can see more details about the conditions of participation and deadlines HERE.

It should be noted that during the past year, there were indications that NIS could become the majority owner of Petrohemija through the construction of a polypropylene factory and a recapitalization in the amount of EUR 150 million. However, aside from the formation of working groups that took this possibility into consideration, no further progress has been made. Even then, economists warned that the choice of a strategic partner was the only salvation for Petrohemija because the state has no capacity to bring this factory around into the positive business, and there were even proposals for a Russian investor to take over the entire factory. However, so far none of the previously offered solutions has been implemented.

After the public call has been published, the President of Serbia, Aleksandar Vucic, also said that it was possible for bids for Petrohemija to come from two, maybe even three countries.

- It is quite possible for the offers to be from two or three countries who find interest in that. We once talked to Gazprom and other partners, from Azerbaijan to Iran, but we never managed to find a strategic partner - said Vucic, reports Tanjug.

He added that the financial situation in the factory is not critical and that EUR 82 million is in the account, which is enough for the factory to work smoothly for the next year. He told the workers that they do not have to worry, and emphasized that at this moment it is best to find a strategic partner who will take care of the factory for the next 20 years.

Fear for workers' wages

The president of the Independent Trade Union of Chemistry and Non-Metals, Ljubisa Nestorovic, told the Tanjug news agency today that salaries in Petrohemija have not changed for years, which is why the factory was left without the necessary professional staff, so no excessive layoffs are expected due to such a situation.

As he said, the conditions for dismissal of workers are defined in the concluding part of the documentation on privatization.

- It is stated that in the first year, 5% of the staff can be fired, in the second 15%, in the third 10%, provided that they had been hired for an indefinite period of time. In the remaining three years of the investment cycle, there are no hints on technological redundancy - said Nestorovic.

He also assessed that this topic will not be relevant precisely due to the lack of professional workers.

- Low wages are a big problem, because they have not been increased for a single dinar in 10 years time, that is why there is a lack of professional staff - said Nestorovic and added that he expects some people to leave Petrohemija, which will present a big problem because of all the years invested in training a skilled workforce.

In the end, the president of the union expressed dissatisfaction that the privatization documentation does not envisage any obligation of the investor according to the amount of the workers' salary.
- There is no mention of this, neither in this one nor in any other conclusion of the Government of Serbia of this type. I am dissatisfied that we are still the cheapest labor force and that we allow investors and new investments to appear without talking about salaries at all - Nestorovic concluded.

N. I.

HIP-Petrohemija a.d. Pančevo

Akcionarski fond Beograd

Ministarstvo privrede Republike Srbije

Beogradska banka a.d. Beograd

Lukoil Srbija a.d. Beograd

NIS a.d. Novi Sad

privatization

public call

strategic partner

polypropylene

factory