July 3, 2013 / 4:01 PM / 4 years ago

Serbia tells drugmaker Galenika to cut jobs, pay its own debts

BELGRADE, July 3 (Reuters) - Serbia’s government told debt-ridden drugmaker Galenika to cut jobs and wages, rejecting union demands for more financial support following the collapse of a possible sale of the company.

Serbia is trying to offload up to 175 loss-making state enterprises, including Galenika and national flag carrier JAT, in an attempt to trim its budget deficit to 4.7 percent of output.

Canada’s Valeant pulled out of a possible bid in Galenika last month, citing, among other things, union opposition.

With a workforce of about 2,000 people, Belgrade-based Galenika has accumulated debt of around 170 million euros ($221.59 million) and needs about 50 million euros in additional capital in 2013.

Serbia’s finance ministry said on Wednesday that the company should cut the workforce to 1,200 and the wage bill by 20 percent, using the savings to pay off suppliers.

“There were no obligations undertaken nor promises made that taxpayer money would be spent on Galenika’s unpaid bills,” it said in a statement.

Galenika unions had called on the government earlier on Wednesday to help pay back suppliers.

$1 = 0.7672 euros Reporting by Aleksandar Vasovic; Editing by Pravin Char

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