March 26, 2010 / 2:44 PM / in 8 years

Serbia may assume JAT debt to lure investor-PM

BELGRADE, March 26 (Reuters) - Serbia is considering ways to make loss-making national carrier JAT Airways attractive to investors, such as taking on its debt and paying for redundancies, the prime minister said on Friday.

Mirko Cvetkovic told Reuters the current situation at JAT was so dire that “not only will no one give you a single penny, but you will have to pay someone to come in”.

Serbia has long sought to find a buyer or partner for JAT and, earlier this week, the government said it would launch a tender next month to find a partner to revive JAT. [LDE62M1IU]

Cvetkovic said the plan under discussion was modelled after that used recently to sell Greece’s Olympic Airlines.

“This model basically is that you are creating a new core and the new core is (taking over) the activity of the existing company while the government takes care of the redundant workers and the asset of the existing companies and obviously the credit,” he said.

“If we are paying, which we will probably have to do, then why don’t we start at the very beginning and (with) this payment ... resolve the inherited problems in the area of creditors and redundant people.”

Serbia, which is JAT’s largest creditor, is seeking a partner to take a 51 percent stake, although any carrier not party to the open skies agreement could get a 49 percent stake and Serbia would sell off another two percent to another firm to retain only a minority stake, Cvetkovic said.

Earlier this month, JAT announced a 16.5 million euro ($22 million) loss for 2009. It said it planned to borrow 51.5 million to restructure and renew its ageing fleet and prepare for a potential partnership with Turkish flag carrier Turkish Airlines (THYAO.IS) which has not yet made any decisions. [ID:nLDE62F10L] [ID:nIST006727]

Cvetkovic said Turkish Airlines was one of several potential buyers.

He also said on Friday that Serbia planned a September auction of a stake in Telekom Srbija, the country’s most successful state-run firm, to invest in infrastructure. [ID:nLDE62P1CI] (Editing by Dan Lalor) ($1 = 0.7502 euro)

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