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I INTRODUCTORY PROVISIONS
Article
1
This decree regulates the procedure and method of sale of
socially-, and state owned capital (hereinafter: capital) and/or
property by public auction.
In a public auction, price and buyer with whom contract is
executed for the purchase of capital and/or property is
determined.
Article 2
The expressions used in this decree shall have the following
meanings:
Agency for Privatization (hereinafter: the Agency) is the legal
entity, which promotes, initiates, conducts and controls the
procedure of privatization, in accordance with law.
Public auction (hereinafter: auction) is the method of
privatization by public competition of participants in
accordance with determined terms of sale.
Auction Commission is the Commission, which conducts the sale of
capital and property by auction (hereinafter: the Commission).
Auctioneer is the individual, who technically carries out the
auction.
Deposit is the money amount paid by the interested parties for
the purpose of securing participation in an auction.
Starting price in an auction is the lower amount of the range of
value of capital and/or property as confirmed by the Agency for
Privatization.
Special auction is the competition in which the price is lowered
by decreases from the starting price until one of the
participants in the auction agrees to buy such capital and/or
property at the announced price.
Starting price in a special auction is the higher amount of the
range of estimated value of capital in the entity being
privatized.
The minimal price in a special auction is the amount of deposit
below which the capital and/or property cannot be sold.
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II PREPARATION OF AUCTION
Article
3
The decision on the sale of capital by public auction is
made by the Agency, and it shall inform the entity being
privatized to this effect.
Article 4
The Agency organizes an auction.
In the procedure of organizing an auction, the Agency shall:
1) Prepare the auction, including the determination of date and
time at which the auction is to be held as well as the
announcement of public invitation,
2) Form the auction Commission,
3) Control and approve the program of privatization,
4) Conduct other operations of importance for the conduct of
auction.
Auction is organized in co-operation with the stock exchange.
Article 5
The Agency announces the public invitation for the
participation in an auction (hereinafter: public invitation) in
the public media (press, television, internet) no earlier than
30 days prior the date at which the auction is to be held.
The public invitation referred to by paragraph 1. of this
article consists of:
1) Name of the entity being privatized and its identification
number,
2) The percentage amount of capital, and/or description of
property being offered for sale,
3) Financial and other information on the entity being
privatized of importance to the participants in the auction
(number of employees, products etc.),
4) Place and address at which the auction is to be held,
5) Date and time at which the auction is to be held,
6) Code of the auction sale,
7) Deadline and manner for the submission of applications for
participation in the auction,
8) Date, time and place for the registration of participants,
9) Price, place and manner for obtainment of auction
documentation,
10) Amount and method of payment of deposit for participating in
the auction,
11) Short description of the auction procedure,
12) Starting price for the auction,
13) Means of payment,
14) Date, time and place for visiting the entity being
privatized.
Article 6
The entity being privatized and the Agency determine the date
and time of visits to the entity being privatized.
Interested parties can visit the entities being privatized upon
their signing of the contract on safe-keeping of confidential
information (confidentiality agreement).
Article 7
The Agency and the auction Commission shall secure under the
same conditions the access to information of importance to the
auction to all interested parties.
Article 8
Sale by method of auction is conducted by the Commission, which
is appointed by the Agency.
The Commission, in co-operation with the Agency and the
competent bodies of the entity being privatized, secures the
necessary conditions for the holding of an auction.
The Commission has five members.
The Commission appoints its chairman from the ranks of its
members.
Commission is appointed for one or more auctions.
Article 9
The Commission carries out the following activities:
1) Oversight and conduct of an auction sale,
2) Registration of parties entitled to participation in an
auction,
3) Appoints the auctioneer and his/her assistant,
4) Maintains order in an auction and announces measures in case
of auction's procedure being disrupted,
5) Declares the buyer,
6) Signs the record/minutes of auction,
7) Declares the auction unsuccessful,
8) Conducts other activities of importance to the carrying out
of auction, in accordance with law.
The Commission makes decisions by majority votes of its members.
Professional, consultative, administrative and technical
activities for the needs of the Commission shall be conducted by
the Agency.
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III APPLICATION FOR PARTICIPATION AND REGISTRATION OF
PARTICIPANTS
1.
Auction documentation
Article 10
Auction documentation consists of:
1) Privatization program,
2) Confidentiality agreement,
3) Draft of sale contract,
4) Application for participation in an auction.
The auction documentation is sold to the individuals and legal
entities, which express their interest in participation in an
auction at the price determined by the minister in charge of
privatization affairs.
The confirmation about the payment of price referred to by
paragraph 2. of this article for the auction documentation
entails the code of the auction and can be submitted directly to
the Agency or at the place determined in the public invitation,
and can also be sent by fax to the number determined in the
public invitation.
Upon the receipt of the confirmation referred to by paragraph 3.
of this article, the auction documentation will be submitted or
sent to the interested individuals or legal entities within the
deadline of three days.
2.
The contract of sale
Article 11
The draft of sale contract is produced by the Agency
(hereinafter: draft contract).
Draft contract contains the purchaser's obligation to secure
continuity of business operations by the entity being
privatized, the conditions for use of land, means and terms of
paying the price.
Draft contract can contain the purchaser's obligation to invest
funds into the entity being privatized, resolution of labor
issues, and environmental protection.
Draft contract does not include the sale price.
The participants in an auction sign the draft contract before
the holding of the auction.
By signing of the draft contract, the participants in an auction
take upon themselves the obligation of accepting the terms from
the draft contract.
Draft contract into which the sale price is entered as well as
the information about the auction participant who was declared
the buyer in that auction, and which is signed by the competent
individual of the Agency and of the entity being privatized,
becomes the contract of sale.
The sale price is the last price determined at an auction.
3.Participation in an auction
Article 12
Domestic and foreign legal entities and individuals are entitled
to participation ion an auction.
Parties referred to by paragraph 1. of this article can
participate in an auction if they have:
1) Purchased the auction documentation,
2) Been registered as participants in the auction,
3) Paid the deposit,
Article 13
When a participant applies for participation in an auction for
the purchase of one or more entities being privatized, such
participant can authorize one individual for representation in
the competition, such individual being responsible for the offer
of participant and the fulfillment of all obligations to the
Commission.
Authorization referred to by paragraph 1. of this article must
be verified in court.
Article 14
The following are not entitled to participation in an auction:
1) Individuals and legal entities with financial obligations
towards the entity whose capital and/or
property is subject of privatization,
2) Members of the Commission,
3) Next of kin, of the first inheritance level, of the
Commission's members,
4) Legal entity owned by Commission's members,
5) Legal entity owned by next of kin, of the first inheritance
level, of the Commission's members
6) Other individuals and entities in accordance with law.
4.
Application for participation in an auction
Article 15
The application of a domestic individual for participation in an
auction consist of:
1) Auction sale code and the name of entity being privatized,
2) Name and surname,
3) Name and surname of one of the parents,
4) Address, identification number and signature,
5) Telephone and fax numbers,
6) Account number for the refund of deposit,
7) Confirmation of the competent body of Public Revenues about
the fulfillment of obligations on
account of taxes, contributions and other charges, not older
than 15 days from the day of submitting of application for
participation in auction.
The application of a domestic legal entity for participation in
an auction consist of:
1) Auction sale code and the name of entity being privatized,
2) Trading name and identification number,
3) Name and surname of the director and his/her signature,
4) Verified photocopy of the extract from the Court Register,
5) Verified photocopy of authorization for representation in an
auction issued by the competent body,
6) Account number for the refund of deposit,
7) Confirmation of the competent body of Public Revenues about
the fulfillment of obligations on
account of taxes, contributions and other charges, not older
than 15 days from the day of submitting of application for
participation in auction.
The application of a foreign individual for participation in an
auction consist of:
1) Auction sale code and the name of entity being privatized,
2) Name and surname,
3) Name of one of the parents,
4) Address, nationality, individual identification number and
signature,
5) Account number for the refund of deposit.
The application of a foreign legal entity for participation in
an auction consist of:
1) Auction sale code and the name of entity being privatized,
2) Trading name and identification number,
3) Name, surname and the signature of director,
4) Verified photocopy of the extract from the Court Register,
5) Verified photocopy of authorization for representation in an
auction issued by the competent body,
6) Account number for the refund of deposit.
Article 16
Together with the application, signed draft of contract referred
to by article 11. of this decree and evidence of the effected
payment of deposit shall be submitted.
The completed application for participation in an auction,
signed draft of contract and evidence of the effected payment of
deposit are submitted to the Agency within the deadline which
cannot be shorter than 15 days prior to the date determined for
the holding of auction.
Article 17
The Agency is obliged to, at least seven days prior to the date
determined for the holding of auction, inform the interested
individuals and legal entities about the approval of the
applications for participation in the auction.
The Agency can forward, to the interested individuals and legal
entities, the request for the supplements or amendments to the
applications for participation in an auction, which do not
include all the necessary documentation, within two days from
the date of submitting of notification referred to by paragraph
1. of this article.
Information about the number of participants in an auction
cannot be given prior to the holding of auction.
The Agency can decide to cancel an auction, if it judges on the
basis of applications that the principle of free market
competition is violated, and it shall inform the interested
individuals and legal entities to this effect.
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IV CONDUCT OF AUCTION
1.
Registration of participants in an auction
Article 18
The Commission conducts the procedure of registration of
participants in an auction.
The registration encompasses:
1) The verification of identity of the applicant or his/her/its
authorized representative,
2) The verification of authenticity of authorized
representatives' authorizations,
3) The verification of the Agency's approval for the
participation in auction,
4) The issue of a numbered auction card,
5) The signature of the applicant or his/her/its authorized
representative on the list of participants.
Interested parties, which have obtained the approval, referred
to by article 17, paragraph 1. of this decree, but have failed
to register for an auction thereby forfeit the entitlement to
the refund of deposit.
Article 19
The Commission commences the registration of the participants in
an auction two hours prior to the start of the auction, at the
place at which the auction is being held.
The registration of the participants shall be completed 10
minutes prior to the commencement of the auction.
It shall be considered that the conditions for the holding of an
auction are in place if at least one applicant obtains the
status of participant in the auction, if such participant is
present at the auction, or if such participant's authorized
representative is present at the auction.
In cases where the conditions referred to by paragraph 3. of
this article are not fulfilled, the Commission shall declare the
auction unsuccessful.
2.
The course of auction
Article 20
Auction is public and all interested individuals can be present.
Article 21
The Chairman of Commission is obliged to secure equal treatment
of all participants in an auction and the orderly procedure of
announcing of offers.
Article 22
At
the time determined as the time of auction's commencement, the
auctioneer opens the auction and:
1) Announces the name of the entity being privatized and the
auction sale code,
2) Announces the percentage of capital and/or the property being
offered for sale,
3) Announces the starting price and explains the further course
of the auction procedure,
4) Invited the participants to request clarification in case
there are uncertainties,
If the participants are not content with the announcements
referred to by paragraph 1. of this article, they can submit an
objection into the minutes of auction, which do not interrupt
the auction.
The Chairman of the Commission shall decide on the validity of
objections referred to by paragraph 2. of this article.
2.1. Auction with one participant
Article 23
If
only one individual or legal entity has acquired the status of
participant in an auction, such participant is declared the
buyer, and the starting price at the auction is the sale price.
If the participant referred to by paragraph 1. of this article
refuses to accept the sale price, such participant forfeits the
entitlement to the refund of deposit.
2.2. Auction with more than one participant
Article 24
If
more than one individual / legal entity have acquired the status
of participant in an auction, the auctioneer announces the
starting price, determines every following increase in the
price, and invites participants to express their offers by the
raising of auction card.
If there is an offer at the level of starting price, the
auctioneer determines the new price having conducted the
previous increase in price, and invites the participants to
express their offers at the newly determined price.
The determination of the new price is repeated as long as the
participants express offers for the newly determined prices.
If, after the second invitation by the auctioneer, no offer is
expressed for the last determined price, the auctioneer
announces to the participants the last invitation for the
expression of offer.
If, after the third invitation of the auctioneer, no offer is
expressed, the Chairman of the Commission declares the auction
finished by banging the hummer, and declares the buyer who was
the first to offer the highest price.
Article 25
If, even after the third invitation by the auctioneer, none of
the participants express their offer for the starting price
referred to by article 24, paragraph 1. of this decree, the
auctioneer declares the initial competition for the sale of such
capital unsuccessful by banging the hummer, and continues with
special auction.
2.3. Special auction
Article 26
If
the initial competition is unsuccessful in accordance with
article 25. of this decree, new competition shall commence
immediately by way of special auction.
Special auction is the competition in which the auctioneer
announces the starting price and lowers it by decreases from the
starting price, each time announcing the new price.
Each following decrease in price by special auction can be
changed in accordance with article 22, paragraph 1, point 3 of
this decree, but cannot be higher than 10 % of the previously
offered price.
The total decrease in price for the sale of capital by special
auction can be effected down to the level of the deposit.
The Auctioneer announces the identification number of the
participant who was the first one to raise the auction card upon
the new price being announced, and declares such a participant
the buyer.
2.4. Maintaining order
Article 27
The Commission is authorized to undertake measures with the
objective of securing the undisrupted course of competition.
The Commission shall publicly warn the participant for the
disruption of the course of competition, and warn the
participants about the measures it shall use in case of
disruption continuing.
If the participant referred to by paragraph 2. of this article
disrupts the course of auction even after the warning, the
Chairman of the Commission announces the measure of his/her
removal, which is carried out voluntarily or by authorized
individuals responsible for the keeping of order at an auction.
Participant disrupts the course of the procedure by his/her
behavior when he/she:
1) Expresses offers contrary to the rules,
2) Disrupts the work of the auctioneer, or of the Commission, in
any other way.
Participants who were removed from an auction are not entitled
to the refund of deposit.
Article 28
The participant, who receives the measure of removal from
auction referred to in article 27, paragraph 3. of this decree,
can submit an objection, orally, into the minutes of the
auction.
The objection referred to by paragraph 1. of this article does
not postpone the auction, and the Commission decides on the
grounds for the objection immediately upon its submission.
The decision of the Commission on the objection is final.
Article 29
Measures referred to by article 27, paragraph 2. of this decree,
can also be imposed by the Chairman of Commission to other
individuals present.
2.5. Means of payment and payment conditions in an auction
Article 30
Means of payment in an auction can be domestic and foreign
freely convertible currency.
Means of payment can also be bonds issued on the basis of the
unpaid foreign currency savings debt to the citizens, which
mature up to the date of sale of capital and/or property, and
which are issued to the citizens of the Republic of Serbia.
In cases where, in the procedure of sale by auction, capital
and/or property is not sold for the means of payment referred to
by paragraphs 1. and 2. of this article, the Agency shall,
within seven days from the date of the auction, announce the
public invitation for the second auction in which the means of
payment are bonds issued on the basis of the unpaid foreign
currency savings debt to the citizens of the Republic of Serbia,
regardless of their maturity date.
If the second auction referred to by paragraph 3. of this
article is declared unsuccessful, the Agency shall decide as to
whether the capital of the entity being privatized is to be
offered at a future auction.
Article 31
If
the declared buyer at an auction is a domestic individual,
he/she can pay the sale price in six equal annual installments.
The first installment is decreased by the value of the paid
deposit, whilst the remaining installments are revised in
correlation with the increase in the retail prices index.
2.6. Minutes of auction
Article 32
Minutes of auction are kept in relation to the commencement,
procession and conclusion of an auction (hereinafter: minutes)
Article 33
Minutes consist of:
1) The list of registered participants,
2) The starting price,
3) The final selling price achieved in the competition and
information about the buyer,
4) Means of payment and terms of payment,
5) The three last expressed offers, if that many were made,
6) The surname and name of the Chairman, of other members of the
Commission and of the minutes-keeper,
7) Date and time of the commencement and conclusion of auction,
8) Measures imposed on participants and other present
individuals,
9) Objections of the applicants,
10) Other information of importance to the work of the
Commission.
Article 34
Minutes shall be signed by:
1) The Chairman of the Commission, its members and the
minutes-keeper,
2) The buyer or his/her/its authorized representative.
Article 35
Minutes are made out in four identical copies, of which two
belong to the Agency, one to the buyer, and one to the entity
being privatized.
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V EXECUTION OF CONTRACT
Article
36
Upon the declaration of buyer, the signing of the minutes
and the execution of the sale contract, the buyer pays the
amount stipulated by the contract of sale, and executed with the
Agency and the entity being privatized.
Article 37
The buyer who does not sign the minutes or does not effect the
payment within the stipulated deadline forfeits the status of
buyer as well as the entitlement to participation in future
auctions and to the refund of deposit.
Article 38
If
the declared buyer does not sign the minutes or fails to effect
the payment within the stipulated deadline, and there were other
offers expressed at the auction, the sale contract is executed
with the participant who expressed the second highest offer at
the price offered by that participant at the auction.
Article 39
If
the declared buyer does not sign the minutes or fails to effect
the payment within the stipulated deadline, and there were no
other offers expressed, the auction is declared unsuccessful.
If the participant who expressed the second most highest offer
refuses to execute the contract or fails to effect the payment
within the stipulated deadline, the auction is declared
unsuccessful.
Article 40
The deposit of the buyer is calculated into the sale price.
There is no interest applicable to deposits paid.
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VI
ACTIVITIES FOLLOWING THE CONDUCT OF AUCTION
Article
41
Deposits are refunded to the participants who did not
acquire the rights of buyer within 15 days from the date at
which the auction was held, excluding the cases stipulated by
this decree.
Should the Agency fail to refund deposits within the deadline
referred to by paragraph 1. of this article, it shall be obliged
to pay the compounded interest in accordance with the law
regulating the rate of compounded interest.
Article 42
The Agency shall inform the Central Registry of securities
within three days from the date of contract execution with the
buyer.
Article 43
The Agency shall announce the results upon the conducted auction
in the public media in which the public invitation referred to
by article 5. of this decree was announced, latest seven days
from the date at which the public auction was concluded.
Article 44
The Commission shall submit to the Agency complete documentation
from an auction on the day following the date at which the
auction was held.
The Agency shall keep the documentation referred to by paragraph
1. of this article for the period of at least three years from
the date of its receipt.
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VII PRIVATIZATION PROGRAM
Article
45
The entity being privatized submits to the Agency the
privatization program within the deadlines and in the manner
stipulated by law.
1. Content of the Privatization Program
Article 46
The privatization program consists of:
1) Basic information about the entity being privatized,
2) Information about the state of assets and liabilities,
3) Analysis of the entity's business operations to date,
4) Forecast of the entity's business operations,
5) Information about the capital valuation estimate,
6) Attachments.
Article 47
Basic information about the entity being privatized are:
1) Trading name,
2) Registered office and address,
3) Identification number from the statistics,
4) Name and code of activity,
5) Name and surname of director,
6) Type of organization,
7) Telephone and fax numbers,
8) Current account number,
9) Associations of the entity being privatized if it is a
company.
Article 48
Information about the state of assets and liabilities consist
of:
1) Balance sheet, which cannot be older than six months,
2) List of property (type, purpose and surface area of real
estate, purpose and surface area of land),
3) List of the most important equipment,
4) List of property and receivables which are the subject of
court disputes with the amount of disputes' value,
5) List of liabilities which are the subject of court disputes
with the amount of disputes' value,
6) List of property under collateral and the list of other legal
entities' property over which the entity being privatized
possesses a collateral.
Article 49
Analysis of business operations to date consists of:
1) Organizational structure with the number of employees, age-
and qualification structure of the labor force,
2) List of main products and/or services,
3) Disposition of the total income, specified by main types of
products and/or services and the structure of markets,
4) Disposition of the operating costs,
5) Disposition of the income statements (profit and loss
accounts) by the annual accounts for the last three years.
Article 50
Projection of business operations consists of:
1) Disposition and evaluation of the market share,
2) Investment plans for long term fixed assets,
3) Forecasted balance sheets and income statements for the
period of five years,
4) Cash flow forecasts for the period of five years,
5) Proposal for the settlement of debts to the competent body of
Public Revenues, to the Agency for the Rehabilitation of the
Banking Sector, and to the state funds.
Article 51
Information about the estimated value of capital consists of:
1) The total bookkeeping value of capital,
2) Bookkeeping value of state- and/or socially owned capital,
3) Value of private capital,
4) Estimated value of capital, which is being privatized in the
range from the lowest to the highest value.
Article 52
The entity being privatized must also submit, with the
privatization program, the following documentation:
1) Decision by the managing board about the adoption of the
program,
2) Verified copies of the entry into court register,
3) Verified copies of the entry into court register of legal
entities whose founder or co-founder is the entity being
privatized,
4) Statute,
5) Verified copies of the entries into land register, and/or
ownership-legal documentation for the real estate over which the
entity being privatized has ownership rights or indefinite
rights of use,
6) Verified copies of the collaterals over entity's real estate
and the crediting contracts secured by collaterals,
7) Verified copies of the collaterals over other entities' real
estate in favor of the entity being privatized and certificates
of the grounds and level of receivables secured by collateral,
8) Verified copies of contracts on the renting of the entity
being privatized or part thereof,
9) Verified copies of contracts on the renting out of property
and equipment,
10) Verified copies of contracts on the hire of property and
equipment or their leasing,
11) Certificate by the competent body for capital valuation of
the valuation's verification,
12) Projection of the value of entitlement of employees to
free-of-charge shares,
13) The list of existing shareholders or members of limited
liability associations, including the individual stakes in the
private capital,
14) Verified copies of contracts on credits, including
installments and repayment schedules,
15) Balance sheet and income statement for the last five years,
16) Gross balance for the previous accounting year.
2.
Approval of program
Article 53
If
the privatization program is made in accordance with law and
this decree, the Agency shall approve the privatization program
(hereinafter: approval) within 30 days from the date of
submission of the privatization program, and shall submit such
approval to the entity being privatized.
Article 54
If
the privatization program does not include the elements referred
to by article 47. through to 52. of this decree, or corrections
or amendments are needed, the Agency shall, with written
explanation, return the privatization program to the entity
being privatized for the purpose of its supplementing and
amending, within 30 days from the date of its submission.
Article 55
The Agency can amend the privatization program in accordance
with law and this decree.
The Agency shall inform in writing the entity being privatized
about the amendments to the privatization program.
Article 56
Privatization program shall be submitted to the Agency in two
verified copies, together with the decision on its adoption by
the competent body of the entity being privatized.
Upon the approval of the privatization program, one copy,
verified by the Agency, shall be returned to the entity being
privatized.
Article 57
This decree comes into force on the day following the date of
its publication in the "Official Gazette of the Republic of
Serbia". |
