Laws on bankruptcy and privatization published – They become effective as of mid August

Yesterday, August 5, 2014, the Laws on bankruptcy and privatization were published at the Official Gazette and they will become effective eight days as of the publication, August 13. The Government estimated these two laws as important and reform ones as well.

The objective of changes and amendments to the Law on bankruptcy is to increase transparency and prevent misuse I automatic bankruptcy, increase of the rights of trustees who have had a secondary role in the process so far.

Faster and more transparent processes should bring to increased level of settlement of trustees in bankruptcy process. Changes will provide terms for business environment improvement, more efficient implementation of bankruptcy process and prevention of misuse and corruption in the process, the Serbian Government states.

More severe control of work of trustees in bankruptcy will be implemented and in case of irregularities, an authorized institution, after carrying out the procedure, is entitled to declare warning measures for license takeaway.

The Minister of Economy, Dusan Vujovic, in his explanation of the Law on bankruptcy, said that changes of the document are small and that the objective was to speed up bankruptcy.

Sales of 584 state-owned companies by the end of 2015

The objective of the Law on privatization is to speed up privatization and generate terms for economic development and preserve social security, the Government states.

The Law on privatization implies completion of privatization of 584 state-owned companies and a deadline for transformation in private property by the end of 2015.

The objective of the law is to protect all key institutes of the markets, especially institute of protected trustees and property institute.

Apart from capital sales, which was contained in the previous law as well, the law implies option of property sales as well.

The law offers more flexible model choice, methods and measures of privatization which will enable companies to find potential partners, investors, buyers and return to economical life if possible, i.e. to look for a solution in bankruptcy if that is not possible.

The regulation governs strategic partnership as a model and capital transfer without compensation

Only two sales methods are planned: a tender followed by an auction and collection of public bids.

Measures preceding privatization process comprise the option of debt write off and option of debt conversion into property i.e. capital.

A buyer can be a domestic or foreign legal or physical entity declared to be a buyer i.e. an entity which signed a sales agreement. Local or foreign convertible currency can be payment asset.

Goran Nikolic, an economic analyst said for eKapija that the objective to end privatization by the end of 2015 is extremely ambitious and that partial implementation would be a huge success.

He adds the state which should run an active campaign, not only media one but to keep potential investors interested, will play a key part in privatization.

- The key interest of the state is that companies start working and to have as small number of people as possible without work.

For Law on Privatization

For changes and amendments of the Law on bankruptcy