Expert: With Another 5% Stake in Oil Company NIS, Serbia Won’t Acquire More Decision Rights

Pancevo oil refinery (Photo: YTPrintScreen)

By acquiring another five percent of shares in oil and gas company Naftna Industrija Srbije (NIS), faced with US sanctions due to Russian controlling stake in the company, Serbia would not gain more rights in controlling the company’s operations, Nenad Gujanicic, chief broker in brokerage firm Momentum Securities, told Beta on Jan. 20, explaining that “if there is a majority owner in a joint stock company, owing 30 or 35 percent of share makes no tangible difference.” 

He also said that in a public joint-stock company, like NIS, a three-fourths majority was required for adoption of any decision, and considering that Serbia already had about 30 percent of shares, it could block any decision. In a limited liability company, one third of shares could be the threshold for gaining additional rights.

Energy Minister Dubravka Djedovic Handanovic has said that Russian oil producer Gazprom Neft and Hungary’s MOL have reached an agreement for Serbia to increase its stake in NIS by five percent, which “would improve its position and ensure more rights in the Shareholders’ Assembly.” She added that “negotiations with an Arab investor are continuing and that the Arab partner (ADNOC) could be involved.” Gazprom Neft has a 56.15 percent and Serbia a 29.87 percent stake in NIS, while the rest belongs to small shareholders.

Commenting on the possibility of ADNOC buying a certain number of shares in NIS, Gujanicic said that “most investors want a controlling package, that is, a 50 percent plus at least one share because minority shareholders enjoy weak protection in Serbia.” “At the moment, I do not see any foreign investor who would want to pay a high price for NIS shares only to become a minority shareholder, while Serbia will still own a larger stake than that investor,” Gujanicic noted. He also said that it was not realistic to expect from anyone to invest in a company, where someone else would have decision rights.