* Company plans to split generation and distribution
* Seen as vital step for liberalisation, EU accession
* EPS says uncollected bills amount to $1.46 bln
* Board decides to reschedule debt, write off interest
BELGRADE, Feb 22 Loss-making Serbian state power
utility EPS hived off its generation activities on Friday as the
Balkan country moves towards liberalising its energy market with
a view to joining the European Union.
EPS needs fresh funds urgently to upgrade infrastructure
that was damaged and mismanaged during the Balkan wars of the
1990s to meet growing demand and cut reliance on imports.
Serbia's Socialist-led government has pledged to maintain
control over EPS but said it needs to be restructured into a
shareholder-owned company with separate production and
distribution operations or face bankruptcy.
Successive governments have used energy bill pricing as a
welfare policy tool, capping them to defend living standards.
The country suffered a recession last year and the utility
lost 33 billion dinars, mainly because it was forced to absorb
the cost of subsidised tariffs.
According to a business plan for 2013 that was approved by
the government, EPS is 50 billion dinars ($602 million) short of
funds for loan repayments, wages, investment and grid
The executive board of EPS also decided on Friday to
reschedule debts and write off non-payment charges on overdue
bills from residential and industrial consumers who owe the
company some 120 billion dinars.
Customers will now be able to pay off their bills in as many
as 24 monthly instalments without paying those charges.
Acting general manager Aleksandar Obradovic had urged the
EPS board to make a decision on borrowing plans for this year,
but it did not address the issue on Friday.
The government appointed Obradovic in September and tasked
him with restructuring EPS, which employs about 30,000 people.
(Reporting By Maja Zuvela; Editing by Tom Pfeiffer)