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Serbia plans sale of indebted drugmaker Galenika
December 14, 2012 / 2:55 PM / 5 years ago

Serbia plans sale of indebted drugmaker Galenika

* Loss-making state enterprises weighing on Serbian budget

* Finmin says to try again to sell JAT Airways and steel mill

BELGRADE, Dec 14 (Reuters) - Serbia plans to seek a buyer for Galenika Pharmaceuticals early next year, as the government tries to offload loss-making state enterprises and slash its budget deficit by almost a half.

Galenika, a prescription drugmaker that employs 2,700, has debt of 170 million euros ($222 million) and would need another 50 million in additional capital next year, finance minister Mladjan Dinkic said on Friday.

Dinkic said the government would issue a tender for the sale after the New Year. “We have no intention of securing sovereign guarantees for its liquidity any more,” he told a news conference

Loss-making state enterprises, many of them relics of the former Yugoslavia, are weighing on the Serbian budget, which is running a shortfall of some 6.2 percent of national output for the year.

Gross domestic product (GDP) is projected to contract 2 percent.

The six-month-old government, trying to secure a new loan deal with the International Monetary Fund, has pledged to slash the shortfall in 2013 to 3.3 percent and return the economy to growth.

Dinkic said the government would try again to sell indebted flag carrier JAT Airways, adding that talks with Russian tank and railcar producer Uralvagonzavod on buying Serbia’s sole steel mill were “going in the right direction” and could be finalised in the first quarter of 2013.

The state bought back the loss-making mill, Zelezara Smederevo, last year from U.S. Steel. Serbia has been trying for years without success to offload JAT, which operates 14 ageing aircraft.

$1 = 0.7641 euro Reporting by Aleksandar Vasovic; Writing by Matt Robinson; Editing by David Holmes

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