Serbia is planning to issue more euro-denominated sovereign bonds on international capital markets before the end of 2020 to fund specific projects in its investment plan, the country’s Finance Minister Sinisa Mali said on Tuesday.
Last week, Serbia sold a $1 billion euro-denominated sovereign bond to pay off more expensive dollar-denominated government debt.
“In the next 12-18 months we will reconsider coming back to the market again, not for budgetary purposes but for specific project financing purpose,” Mali said on the sidelines of an investment conference at Bloomberg in London.
The proceeds of the next issue would be earmarked to help fund some of the upcoming investment projects and would very likely again be euro-denominated, Mali added.
“Our long-term strategy is to decrease our exposure to dollars, because we are simply naturally hedged in euros.”
Speaking about the privatisation of the country’s second largest lender, Komercijalna Banka, Mali said the government had received seven letters of interest and expected the tender commission to meet on Wednesday, publicise the names and kick off the due diligence process.
“We expect that in September we get the final binding offers,” he said. “It’s not going to be cheap, because of the competition.”
Serbia plans to privatise Komercijalna and other assets under a 30-month non-financial advisory and monitoring programme between Belgrade and the International Monetary Fund.
The Serbian state is the single largest shareholder in the bank, holding 41.75%.
Belgrade also plans to sell the stakes in the bank owned by the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), part of the World Bank group, as well as from Germany’s DEG development fund and Sweden’s Swedfund, which the ministry will acquire as part of the tender process.
The stake for sale could be something between 50.1% and up to 83.23% of all ordinary shares issued by the bank.
In March, Austrian lender Raiffeisen Bank, which operates across eastern Europe from the Czech Republic to Russia and down to the Balkans, said it was considering acquisitions to expand in its main markets and did not rule out its interest in Komercijalna Banka.