Bankruptcy or new boss - Extended deadline for proposal delivery for privatization of 502 firms expires

Deadline for delivery of letters of interest for privatization of 502 state-owned companies in Serbia officially expired November 1 and while it has been speculated how many companies will have to go bankrupt, the Ministry of trade communicates that bankruptcy not necessarily means the end of “life” of a specific company but that if accessed properly, it can mean a new start.

Special advisor of the minister of trade, Andrijana Zivanovic, in charge for bankruptcy where, after privatization, the way the things are, more state-owned companies will undergo, said for Tanjug hat bankruptcy should by no means be treated as the final end of the company and the staff lay off.

-Going bankrupt and bankruptcy are not the same things and declaring a company bankrupt does not necessarily imply the end of the business activity of a company – she explained

Declaring bankruptcy, as she specified, is not announcement of sale of a company’s property but special protected status where the company is introduced – an account is no longer blocked, execution procedures over the property do cannot be conducted anymore, etc.

- The status lasts for a limited period of time with an objective to oversee all options for rehabilitation or sale of a company, completely or partially, to a new investor – Zivanovic said.

According to her, so far, bankruptcy has been mainly treated in the passive manner which is partially a reason why the public sees it as a process of company’s end, not as a potential cure.

- Passive approach to bankruptcy is often based on a wrong interpretation of the role of a trustee in bankruptcy. He or she is not and must not be an administrative worker but a manager with specific skills and knowledge – Zivanovic thinks.

She pointed out that shutting down of a company which has at least minimal capacity to hire people and generates new value, is extremely expensive for everybody..

After expiration of deadline for delivery of letters of interest for privatization of state-owned companies, it is expected that the Ministry of trade decides on destiny of these companies, i..e to decide which will go private and which will go bankrupt.

The Law on privatization implies that privatization of state-owned companies should end by the end of 2015.