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Vojin Vlahovic Adviser to the Prime Minister Crans Montana, June 28, 2003

CRANS MONTANA FORUM. Vojin Vlahovic Adviser to the Prime Minister Crans Montana, June 28, 2003. Privatiza tion in Montenegro. Principles. Privatization is not the aim itself but it is a tool to build new economic system and to increase economic efficiency

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Vojin Vlahovic Adviser to the Prime Minister Crans Montana, June 28, 2003

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  1. CRANS MONTANA FORUM Vojin VlahovicAdviser to the Prime Minister Crans Montana, June 28, 2003 Privatization in Montenegro

  2. Principles • Privatization is not the aim itself but it is a tool to build new economic system and to increase economic efficiency • Private property is (or would be) allowed in all areas of activity • Transparency

  3. Results of privatization

  4. Already privatized in Montenegro: • Sold controlling stake of shares in over 120 small and medium enterprises • Sold Niksic’s Brewery to “Interbrew” • 33% of “Insitute Igalo” (Health Tourism) to ICN • “Hellenic Petroleum” – Greece bought national oil distribution company “Jugopetrol Kotor” • Number of hotels at the Coast sold as asset sale to different partners • 91,5% of state-owned shares in “Montenegrobanka” sold to “Nova Ljubljanska banka” • Minority stake (33%) of “ILK” with additional capitalization, sold to “Daido Metal” - Japan

  5. Legal framework for privatization in Montenegro • Securities Law • Law Act on Privatization in Montenegro • Law on Central Bank of Montenegro • Decree on Privatization Funds • Law on Banks • Company Law • Law on Foreign Investments • Restitution Law

  6. Institutions for privatization

  7. Privatization • Rapid Tender • Selling of minority state-owned holdings in these companies followed by investments (additional capitalization): • International Tender • Big companies with state-owned controlling stake will be privatized this way: • Capital market • Minority (5-26%) residual state holdings (owned by state funds) on capital market in about 250 companies will be sold on stock-exchanges in following several months

  8. International tenders in 2003 • KAP • Tender for financial advisor is launched • Tender documentation isbeing prepared • International tender will be launched till the end of year • Steel Company Niksic • Tender documentation is being prepared • International tender will be announced soon (July) • Tobacco Company DKP, Podgorica • Informative Memorandum is being prepared • International tender will be announced during July 2003 • “Gornji Ibar”, Rozaje • Tender documentation is prepared • International tender will be announced in September 2003

  9. International tender in 2003 • Hotel Company “Boka” • Hotel “Topla” • Hotel “Centar” • Hotel “Rivijera” • Hotel Company “Ulcinjska Rivijera” • Hotel “Ada” • Hotel “Mediteran” • Hotel “Galeb” • Hotel “Panorama”, Becici • International tender will be announced very soon International tender will be announced very soon International tender will be announced very soon

  10. International tender in 2003 • “Plantaze”, Podgorica • Company is restructuring and preparing for the privatization • Institute “Simo Milosevic”, Igalo • Tender documentation is prepared • International tender will be announced in October • Hotel Company “UTIP Crna Gora”, Podgorica Tender documentation is in preparation process for: • Hotel “Zlatica” • Hotel “Podgorica” • Hotel “Ljubovic” International tender will be announced soon

  11. Rapid Tender in 2003 • Salt Factory “Bajo Sekulic”, Ulcinj • Tender documentation is prepared • International tender will be announced depending on interest shown • “Marina”, Bar • International tender will be announced depending on interest shown • Hotel “Albatros”, Ulcinj • International tender will be announced in September

  12. Privatization through sale on stock exchange Minority residual state-owned holdings (5-26%) in more then 250 companies will be privatized in following several months. State funds (The Development Fund, Pension Fund and Employment Fund) will sell its minority stakes on capital market.

  13. If an investor shows serious interest in a company, privatization procedure will start no matter whether the privatization of that company is predicted by Privatization Plan!

  14. Old Foreign Currency Savings Shares in companies which are being privatized can be bought by old foreign currency savings. Old foreign currency savings and money have the same treatment in privatization.

  15. Banks in Montenegro

  16. Privatization of Banks • Podgoricka Banka – Sale to strategic partner • Niksicka Banka – Sale on Stock Exchange • Pljevaljska Banka – Sale on Stock Exchange

  17. Problems of post-privatization • Restitution • Slow concentration of ownership • Slow restructuring of companies • Insufficient investments in human capital

  18. Web-sites www.savjet.org(Privatization) www.agencijacg.org (Privatization) www.vlada.cg.yu(Official Government Site) www.montenegro.yu www.visit-montenegro.com(Tourism) www.cfem.org(SME) www.isspm.org(MONET- Montenegro Economic trends) www.cb-cg.org(Central bank of Montenegro)

  19. Thank you for your kind attention! • Tel: +381 81 225 663 • Fax: +381 81 224 138 • e-mail: vojinv@mn.yu

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