July 28, 2016 / 3:16 PM / 3 years ago

Bosnia region fails to attract bidders at auction of drugmaker Bosnalijek

SARAJEVO, July 28 (Reuters) - The government of Bosnian autonomous region Bosniak-Croat Federation failed to sell its minority stake in generic drugmaker Bosnalijek at auction on Thursday, the second unsuccessful sale in its privatisation programme.

The government plans to sell stakes in a number of companies to raise money to plug a hole in its budget. It kicked off the programme last month with the sale of a minority stake in the country’s top insurer Sarajevo Osiguranje but failed to attract any bidders.

Bosnalijek and Sarajevo Osiguranje are strong-performing companies but analysts said potential investors may be avoiding bidding to pressure the government to lower its price.

The Federation put up for auction a 19 percent stake in Bosnalijek on Thursday, offering 1.5 million shares in the company in the hope of raising 23.4 million Bosnian marka ($13.4 million), but again drew no bidders, the Sarajevo Stock Exchange (SASE) said.

The auction was conducted via SASE at 15.50 marka per share. Bosnalijek shares fell 3.7 percent to 12.20 marka after the auction, SASE said.

The Federation government first tried to sell its stake in Bosnalijek in 2010 but failed to find a buyer so soon after the global financial crisis.

A Luxembourg-based company, Haden S.A., is the biggest shareholder with nearly 30 percent in Bosnalijek, and the remainder is held by investment funds and small shareholders.

The government has said it also plans this year to try to sell its stakes in aluminium smelter Aluminij Mostar, engineering firm Energoinvest and tobacco firm Fabrika Duhana Sarajevo.

It also said it would try again to sell its stake in Sarajevo Osiguranje and would cut the offer price to 10.39 marka per share, from 12.99 marka at last month’s auction.

Bosnia’s two regions - the Bosniak-Croat Federation and the Serb Republic - both need cash to plug their budget deficits and finance maturing debt after they failed to secure a new loan from the IMF because of delays in undertaking economic reforms. (1$ = 1.75 Bosnian marka) (Reporting by Daria Sito-Sucic; Editing by Susan Fenton)

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