Prepared by Philippe Marciniak.
See SM/98/130; and SM/95/84. Under the Law on the Transformation of Enterprises with Social Capital enacted in rune 1993, all publicly owned enterprises except agricultural enterprises and cooperatives, a number of “strategic” enterprises, and state-owned enterprises (e.g., the electric power, telecommunications, and railway companies) were slated for restructuring or privatization.
Early privatization efforts were undertaken in late 1989 with the enactment of the Law on Social Capital-i.e., the so-called “Markovic Law” -under which employees were allowed to purchase “internal shares,” generally at a substantial discount to their market value. This legal framework was suspended upon FYR Macedonia’s independence in September 1991.
See Annex III: “Did Privatization Increase Profitability in FYRI? f.”
Whenever a purchaser did not wish to acquire more than 51 percent of the shares, the State ended up with up to 34 percent of enterprises’ shares, as 15 percent of the social capital of socially owned enterprises is reserved for the Pension Fund. The requirement to sell residual shares within 30 days of their acquisition was virtually never met.
Claims transferred over time to the BRA had a book value at end-1997 of about US$559 million, of which US$249 million represents denar claims connected to Stopanska Banka’s rehabilitation and US$310 million, foreign currency claims to Paris Club, London Club, and multilateral creditors.
Cumulative privatization proceeds as of mid-1999 amounted to DM 412 million, of which DM 257 million was paid in frozen foreign currency deposit certificates, DM 97 million in bonds issued to banks and DM 58 million in cash.
Including those enterprises whose giro accounts with the Payments Bureau do not contain sufficient funds to cover end-month payment obligations.
Estimated direct costs for the budget include: DM20 million for social costs (i.e. severance payments, unemployment benefits, and costs for re-employment); DM29.6 million for unpaid liabilities to the State; and DM14.8 million for unpaid liabilities to foreign banks.
The first-market tier includes enterprises with market capitalization of DM 15 million or more, at least 200 shareholders, 25 percent of shares held by outsiders, and three years of audited accounts; the second- tier requires at least DM 5 million capitalization, 100 shareholders, 15 percent of shares held by outsiders, and two years of audited accounts; the third tier includes all unlisted companies.