Serbia To Launch Tender for RTB Bor Copper Smelter Within 10 Days, To Allow Phased Payment in Privatisations

Dinkic said that on Thursday the government will adopt legislation allowing buyers of state-owned assets to pay the purchase price in instalments. Under the planned amendments to the current privatisation regulations, the buyer will be required to pay 30% of the price upon signing the deal and the rest will be payable over a period of up to five years.

“We are waiting for these technical issues to be sorted out before launching the tender for RTB Bor,” Dinkic told a news conference.

The buyer of the smelter will have to agree to take over all debts currently owed by RTB Bor, totalling about $400 million (311 million euro), the ministry’s state secretary Nebojsa Ciric told the same news conference.

The government, which will be a minority shareholder in RTB after the tender, will keep veto rights over important decisions such as factory relocations and production stoppages, Ciric said.

Serbia’s first attempt to sell RTB Bor failed last year, when the government cancelled a $400 million deal with Romania's Cuprom because the buyer had not paid the required bank guarantees on time.

A second tender for RTB Bor failed in April when Strikeforce Mining and Resources (SMR) withdrew from the sale talks. SMR is part of the Basic Element group owned by Russian tycoon Oleg Deripaska.

The Serbian copper group is burdened with debt accumulated during international economic sanctions against former Yugoslavia in the 1990s. RTB Bor, which is the biggest employer in Serbia's eastern region of Bor, has some 8,700 employees, of whom almost a quarter must be laid off before the sale is wrapped up.

Serbia has 442 companies left on its privatisation list, 69 of which the government will open tenders for, Ciric said, adding that 17 companies are already in the process of going private.

The country expects to attract about $4.0 billion in foreign direct investments (FDI) this year, Dinkic said. This forecast is lower than the initially projected $5.0 billion. Serbia attracted some $2.5 billion in FDI in the first seven months of 2008.

Dinkic also said that the government expects to attract $5.0 billion in FDI next year.

($ = 0.7785 euro)