The privatisation of Telekom Srbija has been cancelled because bids for the operator did not meet the government’s expectations.
In a statement late last week Serbia’s prime minister Aleksandar Vucic announced that Telekom Srbija "will undergo reorganisation" to make it more competitive.
Six unnamed companies lodged bids for the government’s 58.1% stake in Telekom Srbija in November, prompting the start of a two-week evaluation period by the Ministry of Trade, Tourism and Telecommunications.
At the time, the government listed three potential outcomes: either a preferred bidder would emerge, the government would attempt to negotiate a higher offer from what it deemed to be the best bid, or the process would be scrapped altogether.
Vucic said late last week that a U.S. investment fund made "the most serious offer"; nonetheless, the decision to cancel the privatisation was unanimous.
In lieu of privatisation, Telekom Srbija’s management will be overhauled in order to improve its performance and hopefully increase its value, he said.
This is the second time in four years that the government has tried unsuccessfully to offload its Telekom Srbija stake.
In 2011, Telekom Austria had a €1.1 billion offer for Telekom Srbija rejected because it was below the €1.4 billion that the government hoped to raise.
