BELGRADE, Aug 14 (Reuters) - The Serbian government has increased its controlling stake in indebted drugmaker Galenika in a debt-to-equity swap that should pave the way for another privatisation attempt, state news agency Tanjug reported.
The government has been trying to sell Galenika as part of efforts to privatise, shut or slim down unprofitable state firms under its 1.2 billion euro ($1.4 bln) loan deal with the International Monetary Fund, but the drugmaker’s heavy debts have discouraged investors.
The government and state gas retailer Srbijagas took on a combined 14.7 billion dinars (123 million euros) of debt in exchange for an 8 percent stake in Galenika, Tanjug said on Monday.
The transaction increases the government’s total stake in the drugmaker to 93 percent.
“This was the first official decision that will lead the company to the privatisation process (this year),” Tanjug quoted Galenika’s in-house head of the Independent Trade Unions, Zoran Pantelic, as saying.
Pantelic was also quoted as saying that after the transaction Galenika now owes 71 million euros to commercial banks, but it was not clear whether it still had other outstanding debt. He also said the company is owed 120 million euros from retailers who have not settled bills for Galenika drugs.
Galenika’s employees hold the remaining 7 percent stake in the company.
The government tried to privatise the drugmaker in 2013 but the sole bidder, Canada’s Valeant, later pulled out, citing the hostility of local unions as one factor.
In February this year, Serbia failed to reach a deal with a group of foreign drugmakers on the sale of a 25 percent stake in Galenika. ($1 = 0.9341 euros) (1 euro = 119.1733 Serbian dinars) (Reporting by Aleksandar Vasovic; Editing by Susan Fenton)
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