analysis 28 Jul 16

Bosnia Struggles to Sell Its Failing Companies

Facing strong international and budgetary pressure, Bosnia's entities resume privatising public companies, but finding buyers for the mostly decrepit and overvalued firms is increasingly difficult.

Drazen Simic
BIRN
Sarajevo
 
The government offered the package of its shares in Sarajevo Osiguranje in June. Photo: sarajevoosiguranje.ba

The Bosnian Federation government announced the sale of its remaining shares in the Sarajevo Tobacco Factory, FDS, late last week.

Experts see the planned privatisation of what was formerly one of Bosnia's most prominent and lucrative firms as a sign of desperation. The announcement comes after the recent failure of Federation attempts to privatise several other companies.

Twice in the last four weeks, the Federation government has tried to sell its shares in Bosnia’s largest insurance company, Sarajevo Osiguranje, but found no suitable buyers, despite the company’s current profitability.

Two weeks ago, the Croatian firm Agram Group expressed interest in purchasing the company, but offered significantly less money than the government expected.

This, and several other similar cases, highlights the serious challenges Bosnia faces in its efforts to privatise its remaining public companies.

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