Serbia to Cut the Start Price for JAT Airways

18.07.2008 (14:08)

Serbia plans to cut the minimum price in the sale of flag carrier JAT due to high global fuel prices, Deputy Prime Minister Mladjan Dinkic said on Thursday.

The government initially priced the airline at 150 million euros and said it would sell a 51 percent stake in a tender expected to be called by the end of this month, Reuters reports.

"We will probably accept our privatisation adviser's recommendation to cut the start price in order to ensure greater competitiveness," Dinkic was quoted as telling Tanjug news agency.

"In other words, we will not convert a JAT debt to the National Bank of Serbia into capital but leave it up to the future buyer to renegotiate and reschedule," he added. He said the government was aware that the airline industry worldwide is being hit by high fuel prices.

"JAT needs investment and we will try to find a strategic partner in a tender and of course there is a reserve plan if we are not satisfied with the outcome of the tender," Dinkic said.

JAT has 209 million euros of debt. Its assets, a two-decade-old fleet of 16 mainly Boeing 737 planes plus real estate, ihave been officially estimated to be worth $150 million.

Local media have reported that Russia's Aeroflot, considered the most serious potential suitor, is no longer interested. Dinkic said the government had not been formally notified.
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