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, 61/2015 and 12/2016) |
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.
II CONDITIONS FOR IMPLEMENTING THE PROCEDURE
Article 2
The procedure of sale of capital and assets (hereinafter: the Procedure) shall be conducted by the ministry in charge of economy affairs (hereinafter: the Ministry), 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) Instruction to Bidders which contains: terms and conditions for participation in the procedure, description of the procedure and deadlines for implementation, conditions for making a comprehensive analysis of business operations of the subject of privatized (Due Diligence), time and manner of the visit to the subject of privatization, criteria for ranking of Bids, copy of this regulation and other data in accordance with this regulation (hereinafter: Instruction 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 Ministry.
Privatization documentation referred to in paragraph 2 of this Article shall be prepared by the subject of privatization and submitted to the Ministry 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 Ministry 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 Ministry, which may not be longer than 30 days from the day of reception of the privatization documentation.
Article 5
The Ministry 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 Ministry 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 Ministry 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 performs the following tasks:
1) Opens and grades the applications i.e. bids;
2) In case of multiple participants in the Procedure, registers the persons who are eligible to participate in the public auction;
3) Performs other tasks relevant to the execution of the Procedure, in accordance with the law and this 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 Ministry.
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 Ministry within the time limit specified in the public call, which may not be less than 15 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 the envelope marked "the Bid", and if the deposit is not paid), the Ministry shall, at the proposition of the Commission, render a decision to reject the application.
If the envelope: "Information on the Bidder" does not contain the information referred to in Article 11, paragraph 4, it. 1), 2), 4) and 5) of this Regulation, the Ministry shall, at the proposition of the Commission, invite the participant to supplement it not later than eight days after the day of receipt of the decision.
If the participant fails to execute the supplement in accordance with paragraph 5 of this Article, the Ministry shall, at the proposition of the Commission, render a decision to reject the application.
If the participant does not fulfill the conditions prescribed for the buyer in accordance with the law that regulates privatization, public call or instruction to bidders, the Ministry shall, at the proposition of the Commission, render a decision to reject the application.
The Ministry shall, at the proposition of the Commission, render a decision to approve the application which fulfills the conditions in accordance with the public call, this Regulation and the Instruction to Bidders.
If no application meets the prescribed conditions, the Ministry shall, at the proposition of the Commission, render a decision to 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 Ministry shall, at the proposition of the Commission, render a decision to 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 Ministry shall, at the proposition of the Commission, proclaim the Procedure unsuccessful.
The Ministry shall deliver the decision referred to in paragraph 5 of this Article to the participant.
The decision referred to in paragraph 5 of this Article shall be announced on the web page of the Ministry.
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 Ministry shall, at the proposition of the Commission, 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 Ministry shall, at the proposal of the Commission, 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 participant who placed the highest bid and the participant who placed the second highest bid.
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 shall mark the end of public auction by the strike of the hammer and proclaims the participant who offered the highest price and the participant who offered the second highest bid.
If none of the participants, even after the third call of the auctioneer accepts the initial price, the public auction shall be 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 Ministry, 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.
Following the public auction, the Commission shall inform the Ministry about the participant who placed the highest bid and about the participant who placed the second highest bid.
The Ministry shall issue a decision to proclaim the participant who placed the highest bid as the buyer and to proclaim the participants who placed the second highest bid.
Obtaining Opinion of the Competent Organization for the Prevention of Money Laundering
Article 29
Before the execution of the sale contract, the Ministry 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 Ministry’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 sale contract shall be concluded at the latest within the term of 30 days starting from the day the opinion on the absence of impediments on the side of the buyer referred to in Article 29 of this regulation was obtained.
Article 31
Contract on sale of capital is deemed to be concluded when it is signed by the buyer and the Ministry 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.
Article 33
If the proclaimed buyer who is invited to conclude the contract fails to sign the sale contract, or fails to pay the purchase price in accordance with the sale contract, 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.
Loss of Right to Deposit Refund
Article 34
The participant shall lose the right to deposit refund if:
1) He withdrew the application, or cancelled the bid;
2) He submitted documentation in the application, which turned out to be not correct, valid or trustworthy;
3) He did not perform application supplement in accordance with this Regulation;
4) He was proclaimed as the buyer, he was invited, but failed to sign the sale contract;
5) In other cases in accordance with this Regulation;
6) In other cases defined by the Instruction to Bidders.
Article 35
The deposit shall be refunded to the Proclaimed Buyer in accordance with the sale contract.
The deposit shall be refunded to the participant within the term of 15 days from the day of rendering of the decision whereby his application or bid was rejected.
In case of multiple participants, a participant’s deposit shall be refunded within the term of 15 days from the day the public auction took place, except for the participant who placed the second highest bid whose deposit shall be retained until the closing of the transaction in accordance with the sale contract.
In case of annulment of the procedure, the participant’s deposit shall be refunded within the term of 15 days from the day of rendering of the decision on the annulment of the procedure.
No interest shall be charged for the timely refunded deposit.
The deposit of the participant who lost the right to deposit refund in accordance with the Article 34 of this Regulation, shall not be refunded.
Article 36
The Ministry shall proclaim the Procedure unsuccessful if:
1) No applications were submitted;
2) None of the applications meets the requirements;
3) None of the bids meets the requirements;
4) The sale contract is not concluded;
5) In other cases in accordance with this Regulation;
6) In other cases defined by the Instructions to Bidders.
The Ministry may render a decision to annul the procedure at any time, until the signing of the sale contract.
The decision to proclaim the procedure unsuccessful, or to annul the procedure, shall be published on the website of the Ministry on the day of its rendering and shall be delivered to the participant within the term of five days of the day of its rendering.
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".