Free EPS shares to arrive – What will we get out of the announced public companies’ shares?

If it is to believe to the Minister of Energy, Zorana Mihajlovic, citizens could expect free shares of the Electric Power Industry of Serbia (EPS) by the end of March latest. If this would become true, EPS would be the largest company at the Belgrade stock market.

As Mihajlovic says "EPS will definitely become a shareholder company in Q1 2014 which will enable free shares to citizens. She told to Beta agency that by EPS transfer to a shareholder company, it will be possible to set the share value and to define the number of free shares citizens, former and current employees will get.

Nenad Gujanicic, a broker at Wise brokera thinks the state is the only one which can make that decision.

(Photo: Jelena Đelić)

He explains that, technically speaking, the sole share division is the most complex part of the procedure companies which are subject to the Law on the right over free shares and compensation.

Milutin Lekic, a financial analyst and an editor of Kapital,is pessimistic about the announced timeframe for free shares distribution.

He adds that “ in any case, the share division does not mean a lot if the state starts violating the law again and if does not release them at the stock market as it is the case with Telekom who has been late for more than a year with listing.”

Optimism from the Ministry

Unlike Lekic, the Minister Mihajlovic is sure of her statement, saying she has no doubts that EPS is the company which can have excellent share value. She estimated that, compared to other public companies, EPS went far in reform but that, according to her opinion, must be more efficient.

As she adds, EPS snabdevanje company has been set up which is the first step in the organizational changes, financial reforms have also been extensive so EPS can no longer be referred to as the company “with an incredible minus”.

(Photo: ekapija)

- It is highly likely that EPS will end 2013 positively, not only from the accounting aspect but because it carried out financial reforms – Mihajlovic pointed out.

She said EPS is missing investments in production, distribution network first of all because there are almost different voltage levels in the country because distribution network has not been built.

- Investments are needed but EPS is one of the systems which in future can generate benefits to Serbia, i.e. to shareholders – Mihajlovic said.

The half-alive to come to life again

Although December saw turnover increase at the Belgrade stock market, situation at our capital market is far from what we had before the crisis. Participants of the Stock market are of the same opinion when they say they lack sufficient number of quality shares which they could offer to investors. This could change with listing giants such as Telekom, EPS, etc.

- Potential EPS listing would be a serious step at the “worn-out” capital market since the lack of quality financial instruments is one of its major disadvantages – Grujanicic says.

He adds that capital of some EUR 6-7 billion, EPS would be the biggest company ath the stock market and thus with a big chance to attract potential investors.

Milutin Lekic also thinks that listing of EPS “would definitely be an event of a decade for the Belgrade stock market since EPS is the most important and the most valuable company in our country.”

- Stepping out to the stock market would means we can but shares of the Electric Poiwer Industry of Serbia and thus to generate profit in the future because privatization has been mentioned for years and the Russians, American, German RWE are the interested buyers.

This is what we got so far

(Photo: I.Vukša)

Up till now, each citizen of Serbia got five NIS shares and one share of the Nikola Tesla airport. The Agency for Privatization announced long time ago that citizens should also get seven shares from the Shareholder Fund with a unit value of RSD 550.

One could make the biggest profit out of NIS shares. The initial price totaled some RSD 500 while today it totals RSD 931 (it even reached RSD 1020 in the meantime).

In the meantime, NIS shared dividends so citizens got RSD 300 apart from shares.

On the other hand, shares of the airport recorded a slight increase. It went up to RSD 486 from the initial RSD 448 which was the initial price at the beginning of trading.

According to Blic, out of 4,8 million citizens who were entitled to free shares, 2,3 million of them sold NIS shares while two million of citizens sold shares of the Airport.

Jelena Djelic