REGULATIONON CONDITIONS, PROCEDURE AND MANNER OF SALE OF CAPITAL AND ASSETS BY THE METHOD OF PUBLIC INVITATION TO BID WITH PUBLIC AUCTION("Off. Herald of RS", Nos. 122/2014 and 61/2015) |
Article 1
This decree regulates the conditions, procedure and manner of sale of following capital and assets by public invitation to bid with public auction:
1) Socially owned, i.e. public capital (hereinafter: the capital) and assets in companies and other legal persons, including public enterprises and public capital expressed in shares or stocks;
2) Shares, i.e. stocks after the termination of the contract of sale of capital;
3) Assets in companies in which the contract of the sale of capital was terminated;
4) Shares, i.e. stocks of the Shareholder Fund, as well as of the Development Fund of the Republic of Serbia and the Republic’s Fund for Pension and Disability Insurance, when sold together with the shares or stocks of the Shareholder fund.
II CONDITIONS FOR IMPLEMENTING THE PROCEDURE
Article 2
The procedure of sale of capital and assets (hereinafter: the Procedure) shall be conducted by the Agency for Privatization (hereinafter referred to as: the Agency), in accordance with the law governing privatization and this Regulation.
Article 3
Preparation of sale includes:
1) Preparation of sale documentation;
2) Announcement of a public call for submitting bids for participation in the Procedure.
Article 4
Sale documentation consists of:
1) Confidentiality Agreement;
2) Instructions to Bidders;
3) Application Form for participation in the Procedure;
4) Draft Sale Contract.
In addition to the documentation referred to in paragraph 1 of this Article, sale documentation shall also consist of the privatization documentation that contains:
1) In the procedure of sale of capital:
(1) Basic information on the subject of privatization;
(2) Information on the condition of assets and liabilities (real estate overview, major equipment overview, overview of the property and claims which are the subject of lawsuits with the amount of value in dispute, overview of liabilities that are subject of lawsuits with the amount of value in dispute, overview of the mortgaged property and overview of the mortgaged property belonging to other legal persons with the subject of privatization as a lien holder), with the balance on the day of appraisal of the fair market value of the capital that is used in the process of sale of capital, as well as information on possible changes from the day of appraisal to the day of publication of the public call;
(3) Analysis of the hitherto operation of the subject of privatization (overview of organizational structure with the number of employees, age and qualification structure, overview of the total revenue per basic types of products, or services, market structure, overview of operating costs);
(4) Charter Documents (Articles of Association, Memorandum of Association);
(5) Legal documentation relating to property (transcripts of cadastre records, inscription of lien rights on movable property in a competent register, other documentation which proves the grounds for acquiring rights to immovable property and most important equipment);
(6) Financial statements for the last three years, together with the auditor's report if there is an obligation of making the audit report;
(7) Data on appraisal of fair market value of the capital that is used in the process of sale of capital;
(8) Statement of the responsible person on the accuracy and comprehensiveness of information.
2) In the procedure of sale of assets:
(1) Program for the sale of assets or an extract from the program for the sale of assets pertaining to the subject of the sale;
(2) Statement of the responsible person on the accuracy and comprehensiveness of information.
Sale documentation referred to in paragraph 1 of this Article shall be prepared by the Agency.
Privatization documentation referred to in paragraph 2 of this Article shall be prepared by the subject of privatization and submitted to the Agency within the term prescribed by the law governing privatization.
The registered agent of the subject of privatization shall be responsible, under criminal, moral and tort liability, for the accuracy and comprehensiveness of the submitted privatization documentation.
Article 4a
The Agency shall check whether the privatization documentation referred to in Article 4 of this Regulation contains all the elements prescribed by this Regulation.
In case some of the elements prescribed by this Regulation are missing from the privatization documentation, the subject of privatization shall add them within the term determined by the Agency, which may not be longer than 30 days from the day of reception of the privatization documentation.
Article 5
The Agency publishes a public call for participation in the Procedure in accordance with law and this Regulation.
Public call referred to in paragraph 1 of this Article shall contain:
1) Business name of the subject of privatization and registration number of the subject of privatization;
2) Information on the structure and value of capital of the subject of privatization;
3) Description and value of capital, i.e. assets;
4) Starting price for the sale of capital, i.e. assets;
5) Means of payment;
6) Time and manner of filing of the application for participation in the Procedure;
7) Sale code;
8) Price, time, place and manner of handover of the sale documentation;
9) Amount and method of payment of the deposit;
10) Date, time and place of the tour of the subject of privatization;
11) Date, time and place of opening of applications;
12) Other information relevant to the implementation of the Procedure.
The Agency shall annul the public call for participation in the Procedure in case it comes into knowledge of the circumstances which completely prevent the execution of Procedure, such as:
- Adoption of an interim measure that prohibits disposal of capital or property which is the subject of sale;
- Existence of obligation of restitution of property in kind within the meaning of regulations that govern the conditions, manner and procedure of restitution and compensation of confiscated property;
- In other cases which completely prevent the execution of the Procedure.
Purchase of Sale Documentation
Article 6
Natural and legal persons who express interest in participating in the Procedure shall sign the Confidentiality Agreement in order to purchase the sale documentation.
After the day of receipt of confirmation of payment of the sale documentation price, and upon signing the Confidentiality Agreement referred to in paragraph 1 of this Article, the sale documentation shall be handed over or sent to the interested natural or legal persons.
Commission for Implementation of the Procedure
Article 7
The Agency shall establish the Commission for implementation of the procedure of public invitation to bid with public auction (hereinafter referred to as: the Commission).
The Commission shall perform the following tasks:
1) Opens the application and decides on the submitted applications;
2) Opens the bids and decides on the submitted bids;
3) Determines the initial price for the public auction in case of multiple participants;
4) In case of one participant in the Procedure, declares the buyer;
5) In case of multiple participants in the Procedure, registers the persons entitled to participate in the public auction;
6) Proclaims the Procedure failed when the conditions are met;
7) Performs other duties relevant to the implementation of the Procedure, in accordance with law and Regulation.
Article 8
The Commission makes decisions by majority vote of all members of the Commission.
Professional consulting, administrative and technical work for the Commission shall be performed by the Agency.
The Commission may decide if a majority of the total number of members is present.
The Commission shall adopt rules of procedure, which shall regulate in detail the issues relevant to the work of the Commission.
The Commission shall keep records to register its work.
Article 9
The Procedure shall include:
1) Submission and receipt of bids;
2) Opening and evaluation of bids;
3) Public auction (if applicable);
4) Execution of the contract.
Means of Payment in the Procedure
Article 10
Means of payment in the Procedure is the dinar and foreign means of payment (foreign currencies and foreign cash).
Proclaimed buyer in the Procedure shall pay the selling price in one installment.
Buyer’s deposit is included in the sale price.
Paid deposit does not accrue interest.
Article 11
Application for participation is submitted in a sealed envelope (hereinafter referred to as: the Main Envelope) to the Agency within the time limit specified in the public call, which may not be less than 30 nor more than 90 days from the day of publication of the public call.
Application for participation shall be submitted on a form which is an integral part of the instructions to bidders.
The main envelope contains:
1) Application of the participant;
2) Envelope marked "Information on the bidder";
3) Envelope marked "the Bid".
The envelope marked "Information on the bidder" shall include:
1) Certificates and declarations that the bidder meets the requirements prescribed for the buyer in accordance with the law governing privatization;
2) Initialed on each page and signed draft sale contract;
3) Proof of paid deposit or bank guarantee;
4) Evidence of fulfillment of qualification requirements, if they were prescribed by the public call, and
5) Other information or documentation prescribed by the instructions to bidders or public call.
The envelope marked "the Bid" shall contain the amount of price offered for the subject of sale.
The bids shall be equal to or greater than the initial price.
Article 12
The procedure of submission and receipt of bids, method of keeping records of received bids, documentation necessary for the identification of the participants in the Procedure, retention of documents, as well as the manner and terms of deposit repayment shall be determined by the instructions to bidders.
Opening of the Main Envelope and Envelope Marked: "Information on the Bidder"
Article 13
The main envelope and the envelope marked: "Information on the Bidder" shall be opened within two working days of the day the term for submission of applications expired.
The opening may be attended by the participants, their representatives or proxies.
The Commission checks whether the Main Envelope has been submitted in accordance with the public call, this Regulation and the instructions to bidders, whether the application is timely and complete, and whether the envelope marked "Information on the Bidder" is complete and in accordance with the public call, this Regulation and instructions to bidders.
If the main envelope is delivered untimely or incomplete (does not contain the application or the envelope marked "Information on the Bidder" or envelope marked "the Bid", and if the application does not contain proof of paid deposit), the Commission shall notify in writing the participant on the rejection of the application.
If the envelope: "Information on the Bidder" does not contain the information referred to in Article 11, paragraph 4 of this Regulation, the Commission shall invite the participant to supplement it not later than eight days after the day of receipt of the notice.
If the participant fails to execute the supplement in accordance with paragraph 5 of this Article, the Commission shall reject the application and notify the participant on the rejection of the application.
The Commission shall approve the application which meets the requirements in accordance with the public call, this Regulation and instructions to bidders.
If no application meets the prescribed requirements, the Commission shall declare the Procedure unsuccessful.
Opening of the Envelope Marked: "the Bid"
Article 14
The envelope marked as: "the Bid" shall be opened only if the Commission approves the application for participation.
The Commission shall inform the participants on the approval of the application at least two working days before the date set for the opening of the Envelope marked as: "the Bid", as well as on the date, time and place of the public auction if there are multiple approved applications.
Participant whose application has been approved shall attend the opening of the Envelope marked as: "the Bid". Otherwise, it shall be deemed that he has withdrawn its bid and he shall lose the right of deposit refund.
Opening of bids shall be public and may be attended by other interested parties.
Article 15
The Commission shall, immediately after opening the envelope marked as: "the Bid", determine whether the submitted bids are in accordance with public call and determine the sequence of valid bids by the amount of price offered for the subject of sale.
The highest offered price represents the initial price at the public auction, in accordance with the law.
Price referred to in paragraph 2 of this Article represents the best bid that is ranked in first place of the ranking list.
The Commission shall reject the bids that are not in accordance with the public call, that contain the offered price lower than the initial price, the bids that do not contain clearly defined amount of the bid, that refer to some other bid, bids given under condition, or that refer to the conditions not provided in the sale documentation and public call.
If the Commission determines that no bid meets the prescribed requirements, the Commission shall adopt a decision to proclaim the Procedure unsuccessful.
The decision referred to in paragraph 5 of this Article shall be announced on the web page of the Agency.
Procedure with One Participant
Article 16
In the event that only one participant takes part in the Procedure whose bid the Commission finds that it meets the prescribed requirements, the Commission shall declare that participant as the buyer.
If the participant referred to in paragraph 1 of this Article fails to execute the sale contract or fails to make payment within the stipulated time limit, he shall lose the virtue of the buyer and the right to participate in the privatization process, as well as the right of deposit refund.
Procedure with Multiple Participants
Article 17
In the event that the Procedure involves at least two participants whose bids the Commission finds to meet the prescribed requirements, public auction shall be conducted immediately after the evaluation of the bids.
The Commission shall, immediately after evaluation of bids, issue an approval for participation in the public auction to participants referred to in paragraph 1 of this Article.
Article 18
The Commission shall, immediately after the evaluation of bids, register the participants at the public auction.
Registration includes:
1) Verification of identity of participants in the public auction;
2) Authentication of proxy authorization;
3) Verification of approval to participate;
4) Issuing of a numbered auction card.
The participants whose application to participate in the public auction is approved but who fail to register, lose the right to deposit refund.
The participants who registered but failed to enter the public auction also lose the right to deposit refund.
Article 19
Two hours before the start of the public auction the Commission begins the registration of participants at the venue of the Procedure.
Registration of participants shall finish ten minutes before the start of the Procedure.
It is considered that the conditions for the implementation of public auction are met if at least two participants whose application for participation in the public auction is approved enter the public auction.
In the event that none of the participants whose application for participation in the public auction is approved enters the public auction, the Commission shall declare the Procedure unsuccessful.
In case that only one participant whose application for participation in the public auction is approved enters the public auction, the provisions of this Regulation on the Procedure with one participant shall apply.
Article 20
The public auction is conducted by an auctioneer.
Article 21
When the conditions for conducting public auction are met, the auctioneer shall perform the following tasks:
1) Invites the participants to place bid on the offered price;
2) Maintains order at the public auction and the imposes measures in the event of disruption of its flow;
3) Proclaims the buyer.
Article 22
The auctioneer announces the initial price at the public auction, determines each further increase of the price, and invites the participants to place a bid by raising their auction card.
If there is a bid on the level of the initial price, the auctioneer shall determine a new price, by implementing a predetermined increment and invites participants to bid on a new set price.
Determining new price shall be repeated so long as the participants bid to newly set prices.
If after the second call of the auctioneer no bid was called out at the last set price, the auctioneer shall issue a last call to participants to place a bid.
When even after the third call of the auctioneer no bid is placed, the auctioneer’s hammer falls which means that the public auction is closed, and the proclaimed buyer shall be the participant who was the first to offer the highest price.
If none of the participants, even after the third call of the auctioneer accepts the initial price at the second auction, the public auction shall declared unsuccessful, and the participants shall lose the right to deposit refund.
Article 23
The auctioneer is entitled to take measures in order to ensure the smooth functioning of the flow of public auction.
The auctioneer shall publicly warn a participant who disrupts the flow of the public auction and warns participants about the measures that will be used if the disruption continues.
If a participant referred to in paragraph 2 of this Article continues to disrupt the flow of public auction even after the warning, the auctioneer shall order him to leave the auction, which shall be executed voluntarily or with the help of authorized persons, responsible for maintaining order at public auction.
Participant disrupts the flow of public auction with his behavior when:
1) Bids contrary to the rules;
2) Disrupts the work of the auctioneer or the Commission in any other way.
The participant who has been ordered to leave shall not be entitled to the right of deposit refund.
Article 24
Participants of public auction who was ordered to leave pursuant to Article 23, paragraph 3 of this Regulation, may file a complaint orally on the record.
The complaint referred to in paragraph 1 of this Article shall not postpone the Procedure, while the validity of the complaint shall be considered by the Commission immediately after its filing.
Commission’s decision on the complaint shall be final.
Article 25
The auctioneer may impose the measures referred to in Article 23, paragraph 3 of this Regulation also to other persons present.
Article 26
If a participant in the Procedure who was proclaimed as the buyer or who has the second highest bid, fails to sign the records, fails to sign the sale contract or fails to make payment within the stipulated time, he shall lose the virtue of the buyer and the right to participate in the privatization process, as well as the right of deposit refund.
Article 27
Records shall be kept about the beginning, duration and end of the public auction.
The records under paragraph 1 of this Article shall contain:
1) List of registered participants;
2) Initial price;
3) Purchase price and information on the buyer;
4) Means and terms of payment;
5) Last two bids, if any;
6) Name and surname of the president, other members of the Commission, the auctioneer and the clerk;
7) Date and time of beginning and closing of public auction;
8) Imposed measures on participants and persons present;
9) Objections to the applicant;
10) Other information relevant to the work of the Commission.
The records under paragraph 1 of this Article shall be signed by:
1) President of the Commission, members of the Commission, the auctioneer and the clerk;
2) Participants in the public auction.
Article 28
Records shall be drafted in a sufficient number of identical copies, two of which belong to the Agency, and one for each participant at the public auction.
A copy of the records shall be delivered to the subject of privatization upon its request.
In the case of the sale of shares or stocks that were transferred to the Shareholder Fund a copy of the records shall be submitted to the Shareholder Fund.
Obtaining Opinion of the Competent Organization for the Prevention of Money Laundering
Article 29
Before the execution of the sale contract, the Agency shall obtain from the competent organization for the prevention of money laundering opinion on the absence of impediments on the side of the proclaimed buyer to execute the contract.
The opinion referred to in paragraph 1 of this Article shall be delivered not later than 15 days from the day of receipt of the Agency’s request.
In the event that according to the opinion of the competent organization for the prevention of money laundering there are impediments on the side of the proclaimed buyer to execute the contract, the person who was proclaimed as the buyer shall lose the virtue of the buyer and the right to participate in the privatization process, as well as the right of deposit refund.
Article 30
The Agency organizes the signing of the sale contract, after obtaining opinion on absence of impediments on the side of the buyer under Article 29 of this Regulation.
Article 31
Contract on sale of capital is deemed to be concluded when it is signed by the buyer and the Agency and shall be certified by the competent authority.
Article 32
The contract on sale of assets is concluded by the proclaimed buyer and the seller in accordance with the law and regulations governing the preparation of documents of a legal transaction.
When the subject of sale are assets consisting of real estate located in the jurisdiction of various official bodies responsible for drawing up the contract of sale, the buyer and seller sign the contract on the regulation of rights and obligations regarding the sale of assets (hereinafter: the Framework Contract), whose integral part shall be the contracts on the sale of real estate.
The Framework Contract is a contract of adhesion and may contain provisions on the amount and term of the buyer’s investment, obligation of conducting business, restriction of disposal of assets through alienation and encumbrance, prohibition of reduction of employees who are employed for an indefinite period, obligation to pay regular salaries to employees, instruments of security for orderly performance of contractual obligations and other provisions.
The Framework Contract is deemed to be concluded when signatures of the buyer and seller are certified by the competent authority.
Article 33
If the proclaimed buyer is invited to conclude the contract but fails to sign the sale contract, or fails to pay the purchase price within the stipulated time limit, and there have been other placed bids, the sale contract shall be concluded with the participant who placed the second highest bid at the price that that participant offered in the Procedure.
If, after the expiry of the deadline referred to in Article 35, paragraph 2 of this Regulation, the Commission invites the participant who placed the second highest bid to conclude the sale contract, he shall pay the deposit within the term specified by the Commission.
If the participant fails to pay the deposit in accordance with paragraph 2 of this Article, it shall be deemed that he withdrew the bid, and the Procedure shall be declared unsuccessful.
Article 34
If the proclaimed buyer fails to pay the purchase price within the stipulated time, and there were no other placed bids, the Procedure may be repeated in accordance with the law.
If the participant who placed the second highest bid refuses to conclude the sale contract or fails to make payment within the stipulated time, the Procedure may be repeated in accordance with the law.
Article 35
The deposit shall be refunded to the participants who did not win the right to be the buyer within eight days after the day of the public auction, except in cases provided for by this Regulation.
The deposit shall be refunded to the participant who placed the second highest bid within 30 days of the day of the public auction.
If the event of failure to return the deposit within the period from para. 1 and 2 of this Article the Agency shall pay default interest in accordance with the law regulating the amount of default interest.
Article 36
After completion of the Procedure, the Agency shall publish the results on the web page of the Agency, no later than seven days after the day the Procedure ended.
Article 37
This Regulation shall enter into force on the eighth day of the day of its publication in the "Official Herald of the Republic of Serbia".
Independent Article of the Regulation on Conditions,
Procedure and Manner of Sale of Capital and Assets
by the Method of Public Invitation to Bid with Public Auction
("Off. Herald of RS", No. 61/2015)
Article 6
This Regulation shall enter into force on the day that follows the day of its publication in the "Official Herald of the Republic of Serbia".