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BELGRADE (Serbia), May 14 (SeeNews) – Majority state-owned Serbian tractor producers Industrija Masina i Traktora (IMT) and Industrija Motora Rakovica (IMR) will form a joint venture company, Economy Minister Mladjan Dinkic said on Thursday.
The government has allocated 400 million dinars ($5.7 million.4.2 million euro) to subsidising tractor purchases by farmers in a bid to help the agriculture sector weather the adverse effects of the global crisis. The measure, which took effect on May 4, allows tractor buyers to chop 2,000 euro off the retail price and take out soft loans at an annual interest rate of 4.5% for a period of up to seven years.
“If demand for subsidised tractors goes up, we will be ready to increase the resources in our budget in order to help domestic tractor industry boost production,” Dinkic said in a statement on the government’s website
The new company will be based in the Belgrade suburb of Rakovica where IMR is located, he said without elaborating on the reasons for the move.
A tender for the sale of 90.05% of IMR failed in January after the sole bidder, Canadian-Serbian consortium Clear Vision Investments & Lilly Drogerie, placed an offer below the minimum price sought by the government. IMR, set up in 1927, has an installed capacity for the production of 50,000 engines and 6,500 tractors per year.
Serbia's latest attempt to sell IMT failed in November after the Agri Investments consortium withdrew from the sale talks and the government's Privatisation Agency declared the tender unsuccessful. The consortium, comprising Belgrade-based MPC Properties and Italy’s Adriano Corsi, offered to pay 76 million euro ($103 million) for 94.5% of IMT.
IMT's net loss widened to 4.173 million euro in 2005 from 666,000 euro a year earlier, the latest available data from the asset-selling agency show. Belgrade-based IMT was set up in 1947. It was the first Yugoslav company to develop a tractor assembly line in 1955 and to manufacture an entirely domestically-produced tractor in 1964. Several minority shareholders own 5.5% of the company.
(1 euro=95.0245 Serbian dinars)