Serbia, Energy company EPS will be transformed from a public company into a joint stock company

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Elektroprivreda Srbije will be transformed from a public company into a joint stock company. The goal of that transformation is not privatization, says Minister Dubravka Đedović, but the creation of a healthy company that will be the backbone of the entire economy. It does not exclude the possibility of the state recapitalizing EPS.

The Electric Power Company of Serbia has been operating inefficiently for years and requires major reform, say the Fiscal Council. After the collapse of the thermal power plant “Nikola Tesla” and with the energy crisis, many problems surfaced. The biggest company has also become the biggest loser.

“It is on the order of up to nine hundred million euros, which is a huge amount. It is not just the price, it is first of all the inefficiency of the EPS, insufficient investment and as a result the non-opening of mines”, indicates the president of the Fiscal Council, Pavle Petrović.

The state decided to solve the old problem, but for now it is only known that there will be no privatization, but transformation into a joint-stock company.

“I guess our goal is to go public one day – to be in London one day, to be a better company. I guess our goal is to attract someone’s capital by three or five percent,” he said on the show “Thursdays at 9”. President Aleksandar Vučić.

When asked if the shares will be sold, he replied that there is no such decision, but that conditions must be created for that, to be on the stock market. He also says that Serbia will always have a majority control package.

“If it can be seen from the outside that they are doing business successfully, then others will also be interested in participating in that success and, accordingly, will make some profit, so they will be interested in buying such shares. In such a constellation of forces, it will be an additional tailwind for EPS.” , points out Željko Marković from Audit House “Dilojt i Tuš”.

Experts for serious EPS restructuring 

Changing the ownership structure of EPS into a joint-stock company can be a good thing, but only if it is followed by a serious restructuring of the company, according to experts.

“We all have to pay the economic price of electricity, that doesn’t mean we will pay for bad business. It’s high time to bite the sour apple, it’s not the first time, it was even sourer in 2014. EPS is a company that can be efficient, but it must mean a completely different approach to its management,” points out Ljubodrag Savić, a professor at the Faculty of Economics in Belgrade.

Pavle Petrović believes that EPS could be profitable from 2024.

“With this increase in January, the average increase for households and businesses will be 20 percent – less for the household, more for the economy. This could allow EPS to operate at a profit when the additional mine opens at Kolubara, meaning, if that in 2024, EPS would then be able to make a profit at this price,” says Petrović.

The Fiscal Council only warns that it would not be good to stop with reforms in 2024, when EPS becomes profitable and ceases to be a burden on the budget, RTS writes.

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