Demostat: EPS to Incur Additional Debt of EUR 1 Billion?

In order for the company to be able to operate without a problem in the coming period, Elektroprivreda Srbije (EPS) will have to incur an additional debt of as much as EUR 1 billion, Demostat learns from sources close to the Government of Serbia.

The reason why EPS will have to apply for new loans is the very bad financial situation at the company due to the business policy carried out during the time Milorad Grcic was the director, who was forced to resign on January 12, 2022, for that reason.

Demostat’s source says that the Government of Serbia intends to solve the problems through new debts of EPS, which already has too much debt as it is. The plan, the source says, is for EPS to borrow EUR 700 to 800 million from banks.

– The idea is to secure the difference up to the amount of EUR 1 billion for EPS through some sort of state subsidies. The information that has appeared in the public that EPS will be transformed from a public enterprise into a joint-stock company in the coming period has led to speculation among experts that those in charge are thereby scrambling to find a way for EPS to get a loan in the conditions of the increasingly strict borrowing conditions for Serbian state companies. In other words, there’s a fear that the ownership transformation of EPS is to take place so that, for the purpose of getting a loan, the company’s shares could be used as a collateral – the source says for Demostat.

The source of Demostat close to EPS, on the other hand, claims that this option will not be used and that the loan will instead be secured through state guarantees and, if needed, by adopting the pertinent decision at the National Assembly of Serbia.

– All things considered, the model for turning EPS into a joint-stock company will be the one that was used in the case of Elektromreza Srbije. That will mean that it is a so-called closed JSC, 100% owned by the state. In practice, that means that the stocks cannot be traded and that the company is not licensed in the stock exchange. The borrowing will therefore be done the same way as before, that is, through state guarantees – points out the source of Demostat.

Vlada Republike Srbije

Akcionarsko društvo Elektroprivreda Srbije Beograd

Narodna skupština Republike Srbije

EPS Rudarski basen Kolubara Lazarevac

Ogranak EPS Termoelektrane Nikola Tesla- TENT d.o.o. Obrenovac

Government of Serbia

National Assembly of Serbia

Elektroprivreda Srbije

EPS

Milorad Grcic

EPS operations

borrowing of state companies

using company shares as loan collateral

ownership transformation of EPS