Cancellation of contract on sale of Prva Petoletka

The Privatization Agency of Serbia cancelled the contract (May 22, 2009) on sale of Industry of Hydraulics and Pneumatics "Prva Petoletka" from Trstenik to the consortium of companies led by Lvivsky Avtobusni Zavod - LAZ from Ukraine.

According to the announcement, the contract with the second-ranked bidder on the tender was cancelled because the consortium did not meet the obligation to pay the first installment, that is, 45% of the purchase price, within 25 working days from the day the contract was signed.

On April 9, 2009, the Privatization Agency signed the contract on sale of "Prva petoletka" to the consortium of companies led by LAZ at the price of 2.5m EUR. The buyer was also obliged to invest 60m EUR in modernization of production.

The consortium also comprise company "City Transport Construction Investment" from Great Britain.

The Agency informed the buyer on the cancellation of the sales contract and collecting of the auction guarantee worth 200,000 EUR.

The buyer of "Prva petoletka" was the second-ranked bidder on the tender that was announced in July 2008.

The contract with the first-ranked bidder, the consortium of Russian companies "Bummass" and "Rosmastorg", was signed in January 2009, but the buyer broke the contract because of the economic crisis.

The purchase price in that first contract amounted to 5m EUR, while the investment programme was worth 30m EUR.

This has been the third united tender for sale of capital of Holding "Prva petoletka", its 11 dependent and 6 dependent companies, while the first two were declared as unsuccessful because there were no interested buyers.