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Thursday, July 31, 2008

Update - Jat Airways privatisation: Tender starts as Aeroflot looses interest

The State Secretary for the economy and privatisation at the Serbian Ministry of Economy and Regional Development Nebojša Čirić said today announced the tender for the sale of Jat Airways. The deadline for submitting offers is the beginning of October. In a statement to the news agency Beta, Čiric said that investors will be able to submit offers for buying a minimum of 51% and a maximum of 70% of the Serbian airliner. The starting price for the airlines 51% share is 51 million Euros decreased from the earlier announced 150 million in order to increase interest. Serbian government has allowed potential buyers to decide which shares they want to buy so that companies from countries that are not in the EU may compete as well, and signed international agreements are not violated. According to the Open Skies Agreement, companies not registered in the EU or Serbia cannot be owners of more than 49% of Jat Airways, but companies from non-EU countries can compete as consortiums, explained Čirić.
Companies participating in the purchase must have an Air Operators Certificate (AOC), that it carried over 1.3 million passengers in the last year and that it has a profit of at least 200 million Euros. Interested investors will be given a deadline of nearly two months, until the end of September or beginning of October, for submitting binding offers.

Aeroflot: We will not take part
The Russian Aeroflot who was rumoured to have taken great interest in the purchase of Jat will most likely not compete in the tender due to unreasonable demands of the Serbian government, according to its press secretary. Aeroflot, as the biggest problem, sees the large starting price for the purchase of 51% of the airline. The chief of Aeroflot’s press management Irina Tanenberg said that Aeroflot is aware of the outlined conditions of Jat’s tender and that the airline has serious reserves about it. “I think that we most likely wont participate in the tender due to the condition which the Serbian government has set., meaning the price. We do not want to pay for an airline which is worth nothing especially during the current world oil crisis“ says Tenenberg.

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