Yugoimport SDPR, the Serbian state-owned intermediary for the import and export of defence-related equipment and technology, has become the dominant owner of Serbia's sole state-owned aviation factory: Pancevo-based Utva - Avio Industrija.
The process of integrating Utva into the structure of the Belgrade-based arms dealer was initiated on 9 February and completed on 28 February, when Yugoimport established effective control of 95.962% of Utva stakes previously owned by the Serbian government.
The transfer of Utva's ownership is the logical follow-on to the previous government-arranged partnership between Yugoimport and Utva, under which the aircraft producer was put under the temporary management of Yugoimport, which facilitated access to its worldwide sales and marketing network and gave Utva a presence on the global aviation market.
However, this did not solve Utva's long-term insolvency problems, which regularly caused delays in payment of salaries and health insurance obligations for its 240 employees and resulted in numerous interruptions to production that occasionally escalated into general strikes.
Commenting on the integration of Utva into the structure of Yugoimport, the president of Utva's workers' union, Slobodan Kosic, revealed that by the end of 2017 the new owner will have invested RSD300-500 million (USD2.6-4.3 million) in modernising the existing factory to improve its production capabilities. He added that the Yugoimport management had promised a stable future for Utva employees, with on-time payment of currently modest salaries that would gradually be increased as future sales revenues allowed.
Want to read more? For analysis on this article and access to all our insight content, please enquire about our subscription options: ihs.com/contact