Serbia may sell 20 pct of drugmaker Galenika to investors

Serbia may offer to sell a 20 percent stake in state-owned drugmaker Galenika to investors and put the proceeds back into the company, the country’s economy minister said on Thursday.

Galenkia was put up for sale earlier this year as part of Serbia’s plans to sell off up to 179 loss-making state enterprises, including the Zelezara Smederevo steel mill and the RTB Bor copper mine, to reduce its budget deficit and also cut down on subsidies and sovereign guarantees.

The government wants the budget deficit to fall to 4.6 percent of output in 2014, down from this year’s 4.7 percent target.

But in June, Canada’s Valeant Pharmaceuticals pulled out of a possible bid for Galenika, citing, among other things, union opposition.

Economy minister Sasa Radulovic said that the sale of a stake in Belgrade-based Galenika, which is 85 percent state-owned, was more favourable than the acquisition by a single strategic partner.

“Proceeds from the sale of 20 percent … would not go to the budget but to company’s development,” he said at a meeting with union activists from across Serbia.

Galenika employs about 2,000 people, and has so far accumulated debt of around 170 million euros ($230.46 million). In July, the government told Galenika to trim jobs and wages and use the savings to pay its debts.

At the meeting, union activists said they were concerned that government’s austerity plan for 2014 would create more unemployment, currently at around 24 percent.

The Socialist-led government plans to trim jobs, sell or shut down unprofitable firms from the public sector that currently employs more than 700,000 people, almost 10 percent of the total population.

Radulovic also said that the government would establish a 200 million euros state fund next year to help restructuring of loss-making state companies.

Source Reuters

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