BROWNFIELD BFS SERBIA
Južna Morava A.D. in bankruptcy Vladičin Han SALE OF ENTIRE ASSETS
Južna Morava A.D. in bankruptcy Južna Morava A.D. – in bankruptcy, Vladičin Han is a producer of electronic and electrical conductors and cords. The company also produces painted-metal and non-metal goods, as well as wood-made packaging. The factory possesses equipment for the production of all types of cords for low-and high-voltage electricity transmission above ground, as well as machinery for producing painted-metal, aluminum and aluminum alloy-based wires, per customers' specifications. In the period of the factory's maximum proliferation and the most effective use of its capacities (2001-2006), it was able to produce approximately 2,900 tons of aluminum-steel conductors.
The company has the following assets at its disposal: · 8,636 m2 OF CONSTRUCTION LAND outside of the construction area, situated on cadastral lot Nos. 575/4, 575/3 and 3316, cadastral municipality Lepenica, · BUILDING STRUCTURES AND FACILITIES (a production hall and an annex built in 1977, totaling 2,918 m2 ; management building constructed in 1978 - 651 m2 ; 44m 2 reception facility built in 1980 - 44 m2 ; garage built in 1988 - 74 m2 ; power transformer station- 67 m2 ); · EQUIPMENT (equipment for producing cords and conductors, transport vehicles, a basket twisting device, a nail production device, a set of telecommunications equipment)
The former key business partners of Južna Morava A.D. included Elektroprivreda Srbije, Energoprojekt and North American d.o.o. The average age of the equipment for cable and cord production is 33 years. Unfortunately, in the course of the past decade, the factory used only 20% of its production capacity, due to a lack of raw materials, insufficient turnover, strong competition and a decreased demand for its products, as the result of introduction of free import policies.
Južna Morava A.D., Vladičin Han – in bankruptcy was established in 1963. It was registered as a joint-stock company on February 19, 1979. On the date of the bankruptcy's initiation, the company had 27 full-time employees, engaged in service provision for other legal entities. By virtue of the Decision of the Commercial Court of Leskovac, No. St.67/2010, dated April 28, 2010, pursuant to Article 150, paragraph 4 of the previous Law on Bankruptcy Procedure (RS Official Gazette No. 84/04), an official preliminary bankruptcy proceeding was initiated, while the company's bankruptcy was proclaimed on January 28, 2011. The first open call to participate in the public auctioning of the assets of Južna Morava A.D., Vladičin Han – in bankruptcy, was launched on August 16, 2013, with an estimated initial asset value of 58,780,365 Serbian dinars. The auction was unsuccessful. The manner of recapitalization, sale of the legal entity or assets, in line with the expressed interests of investors, will be defined pursuant to the new Privatization Act of July 2014.
BFS I BROWNFIELD SERBIA Promotion of brown eld locations in Serbia Južna Morava A.D. in bankruptcy Vladičin Han
Legal Entity Data Registered business name/DBA: Južna Morava A.D. – in bankruptcy, Vladičin Han Status: In bankruptcy Legal form: Open joint-stock company Seat: Vladičin Han, Suva Morava bb (industrial zone), 17510
Legal representative: BranislavMilosavljević, Bankruptcy Administrator Date of Foundation: 19.02.1979. Reg. No.: 07178964 Tax No.- PIB: 100925924 Activity code: 2732 Activity name: Production of other electronical and electrical conductors and cords Key products: Aluminum-steel made cords Cords for protection and grounding of electricity transmitters Motor wire-winding (up to 100 kW) Wooden coils for transporting Ownership structure: shareholders' captial Number of employees: 0
BFS I BROWNFIELD SERBIA Promotion of brown eld locations in Serbia Vladičin Han In the Heart of the Balkans
Vladičin Han is situated in the northwestern Vranje valley, in the vicinity of the Grdelica gorge, 30 km distant from Vranje, 40 km from Leskovac, 92 km from Nis and 330 km from Belgrade. It is connected by regional road to Skopje (120 km) and Thessaloniki (320 km). It borders Macedonia (67 km) in the south and Bulgaria (52 km) in the east. It lies on the very crossroads of main traffic roads and railways. The city is 40 km away from the Highway E-75 (Corridor X). The municipality of Vladičin Han occupies an area of 366 km². There are 51 settlements with a population of 20,938 (2011 Census).
The economy of Vladičin Han is principally based on food, construction and the timber processing industry, as well as the production of paper packages, plastic and plastic-coated products. In the period from 1980 to 1990, the economy of Vladičin Han ranked among the most developed of the former Yugoslavia. After going through a period of painfull changes , social and economic transformations and introduction of the market economy, the once highly export-oriented economy of this municipality collapsed. The biggest problem Vladičin Han encounters nowadays is a huge number of socially vulnerable workers who have lost their jobs. The municipal administration has a great obligation and responsibility towards its citizens and makes extreme efforts to attract potential investors to come and restart production in the factories on the territory of the municipality of Vladičin Han. Almost all companies on the territory of the municipality of Vladičin Han are in the process of going bankupt or have already gone bankrupt. Local self- government and the Local Economic Development Office are actively looking for potential strategic partners or local and foreign investors who could invest capital in reviving old production and available brands or in starting new production. Reconstruction of infrastructure in the available brownfield locations and investments in new technologies and products would ensure a good opportunity for introduction of innovative programs and projects and development of the municipality.
Active companies in Vladičin Han are concentrated in the urban area and industrial zone between the rivers Lepenica and Suva Morava, as well as in the area of Prekodolce, Žitorađe. Having in mind economic requirements and the need for planning development for specific purposes to attract new investments, the municipality of Vladičin Han has adopted a local urban planning design where possibilities for development of existing production and opening of new jobs are presented. In business zones, it is planned to provide space for establishment of small and medium size enterprises, warehouse facilities, business incubators and provision of various services. It is expected that the development of the industrial zone Jug between the river Lepenica and Suva Morava and in the area of Prekodolce, Žitorađe will have a positive impact on the increase of employment (direct and indirect impact), not only in Vladičin Han but also in Surdulica, Vranje and other places in the region.
BFS I BROWNFIELD SERBIA Promotion of brown eld locations in Serbia Property 1.Business complex Cadastral Lot No. 575/4, area 35a69m², cadastral municipality Lepenica, Vladičin Han Type of land: construction land outside construction area Type of right: property, private Size of share: 3107/3592 Numberof structures: 1 Land under structures: 3569 m² Occupancy permit issued for this structure Owner of the structure: Juzna Morava a.d. – in bankruptcy, Vladičin Han Purpose: business
2. Cadastral Lot No. 575/3, area 28a14m² cadastral municipality Lepenica, Vladičin Han Type of land: construction land outside construction area Type of right: property, private Land under structures: 67 m² water Number of structures: 1, powertransformer station Occupancy permit issued for this structure Owner of the structure: Juzna Morava a.d. – state of + bankruptcy, Vladičin Han
3. Cadastral Lot No. 3316, area 27a17m² cadastral sewerage municipality Lepenica, Vladičin Han Type of land: construction land outside construction area + Type of right: property, private Land under structure: 46 m² Number of structures: 1, ancillary facility telephone Construction permit has not been issued for this structure Owner of the structure: Juzna Morava a.d. – in bankruptcy, Vladičin Han + PROPERTY FOR SALE: internet 1) Production hall and ancillary facility (2,918 m²) 2) Management/administrative facility (651 m²) + 3) Power transformer station (67 m²) 4) Reception point facility (44 m²) 5) Construction land on cadastral lot Nos. 575/3, 575/4 heating and 3315, KO Lepenica, Vladičin Han (8,636 m²) 6) Vehicle pool (Yugo-POLI 101 – made in 1989, truck FAP 1616BD, made in 1980, Renault 25, GTX, made in 1985) 7) Equipment (as per specification enclosed in the offer) 8) Material, spare parts and tools (as per specification enclosed in the offer)
Total estimated value: 58,780,265 rsd*
*The estimated value of the property is not an acceptable minimum value, nor is it binding or fixed for the bidder,upon stating the offered price.
BFS I BROWNFIELD SERBIA Promotion of brown eld locations in Serbia 1
2 3 4
5
Building structures 1. Reception Point 2. Management/Administrative Facility
3. Production Hall 4. Garage
5. Power Trasformer Station
BFS I BROWNFIELD SERBIA Promotion of brown eld locations in Serbia SWOT ANALYSIS Strengths Weaknesses
·Good geographic position ·Ongoing bankruptcy procedure ·Good location for investments ·Obsolete equipment and machinery ·Skilled and inexpensive labour force ·Big investments in reconstruction are needed Opportunities Threats
·Relief from a high level of liabilities through ·Prolonged privatization process new models of privatization ·Deepening of the financial crisis, ·Starting new production on a good location instability of exchange rate and interest rates of commercial banks
On the date of the bankruptcy's initiation, the company had no employees. The rst attempt to sell the property of the company, publicized on August 16, 2013 (per Leskovac Commercial Court Decision No. 3 St.67/2010) was unsuccessful. The value of all movable and immovable assets on sale was estimated at 58,780,365 Serbian dinars. The company's liabilities are presented in the table below:
Per Bankruptcy Reported claimed amounts Administrator's Report PROVIDED NOT PROVIDED TOTAL Core (main) debt 1.396.704 50.000.090 51.396.794 Interest on the main debt 2.373.563 28.687.634 31.061.197 Expenditures 170.806 2.768.660 2.939.466 Interest on expenditures 0 178.198 178.198 TOTAL 3.941.073 81.634.582 85.575.655
Južna Morava, A.D. – in bankruptcy, Vladičin Han operates with a signi cant loss, whereas the loss above the level of its capital value equals one-half of the total value of the company's active capital. The Bankruptcy Administrator's report on the economic- nancial status of this company in bankruptcy indicates that its total liquidation value has been estimated at 34.458.285 Serbian dinars.
The Privatization Act, together with the Law on Amendments and Addenda to the Bankruptcy Law has created conditions for the nalization of restructuring and privatization in Serbia. At the beginning of August 2014, 153 Serbian companies were subject to the restructuring process and 419 of them are in various phases of the privatization process. The new Privatization Act (RS Official Gazette, No. 83/2014) speci es December 31, 2015 as the deadline for the privatization process to be nalized for legal entities with remnants of the socially-owned capital in their equity. The basic privatization model anticipates the sale of capital and relieving the company of its burden of liabilities.
The subject of privatization must prepare an inventory and estimate of the fair value of the entire property status on the date of December 31 of the prior business year, in line with the accounting rules and international accounting standards and to submit data about inventory and a fair property appraisal and price to the Agency for Privatization, no later than 45 days after the publication of the public call for the expression of interest. A letter of intent of a potential investor must include: a) Basic information about the interested buyer, or a strategic investor; b) Expressed interest in a particular brown eld structure or model of privatization; c) Indicative price proposal, investment program, framework business plan and the planned number of employees with inde nite employment engagement; d) Other data speci ed in the public call. The Agency shall propose the privatization method, measures for alleviation of the company's liabilities and the initial price, no later than 45 days after the expiry of the time limit for the submittal of the expression of interest, as speci ed in the public call. The privatization method and alleviation measures are prepared only for those subjects of privatization which have obtained at least one letter of intent from a potential investor, found acceptable by the Agency. Pursuant to the law, the initial price for the sale of capital/property cannot be lower than a half of the appraised value of capital/property, and the new initial price, upon the second call for offers and public auction, cannot be lower than one-third of the appraised value of the capital/property.
BFS I BROWNFIELD SERBIA Promotion of brown eld locations in Serbia