In order for the company to function smoothly in the coming period, the Electric Power Industry of Serbia (EPS) will have to borrow an additional amount of as much as one billion euros, Demostat has learned from sources close to the Government of Serbia.
According to Demostat, the reason why EPS will have to apply for new loans is the very bad financial situation in the company due to the disastrous business policy implemented at the time when the director was Milorad Grčić, who was forced to resign on January 12 this year.
“From the new leadership headed by the acting Director Miroslav Tomašević, the authorities expect him to sort out the chaos that Grčić left behind due to the unprofessional and arrogant management of the company. However, that is impossible to achieve without a financial injection to EPS, which was practically brought to the begging stick during Grčić’s mandate. Due to the poor quality of coal, insufficiently provided quantities and the lack of fuel oil, EPS produced less electricity last winter than planned, “explained the interlocutor of Demostat.
The plan, as he said, is for EPS to borrow from banks in the amount of 700 to 800 million euros. It is considered that the rest of the money up to the amount of one billion euros will be provided to EPS through some kind of state subsidies, and there is a fear that the ownership transformation of EPS will occur because the company’s shares could be pledged for the purpose of obtaining a loan, Demostat writes.
A source from Demostat close to Elektroprivreda Srbije claims that this option will not be reached, but the loan will be provided with state guarantees, and if necessary, by making a decision on that in the Assembly of Serbia.
“Apparently, the model for converting EPS into a joint stock company will be the one applied in the case of Elektromreža Srbije. This will then mean that it is a so-called closed joint stock company in 100 percent state ownership. In practice, this means that there is no trading in it shares, nor that the company is licensed on the stock exchange. Therefore, borrowing will go the same way as before, ie through state guarantees, “said a source from Demostat.
What is completely certain is that one of the reasons why EPS will have to reach for new loans for the sake of uninterrupted functioning is that the company was forced to set aside significant sums of money for the purchase of coal from abroad. A special problem is that EPS has its own surface mines from which it is supplied with cheap coal, however, in addition to that, the import of foreign goods has unfortunately now become an urgent need, Demostat writes.
