Decision on Restructuring

Based upon the Article 9, Paragraph 1, Clause 7 of the Law on Privatization Agency("Official Herald of RS", no. 135/2004), and connected with the Article 19 of the Law on Privatization("Official Herald of RS", no. 45/2005) the Privatization Agency of RS made, on October 03, 2005, the

1. THE RESTRUCTURING of the Subject undergoing Privatization Društvo sa ograničenom оdgovornošću zа proizvodnju i distribuciju еnergijе i fluida i pružanje usluga "Еneregetika" Kragujevac, Тrg Тopolivaca br. 4, 34 000 Кragujevac IS INITIATED.
   
2. the Restructuring proceeding of the Subject undergoing privatization stipulated in the Clause 1 of this Decision is carried out by:
   
   • statutory changes, legal form changes, changes related to the internal оrganization and other kinds of changes;
     
   • write-off of the principal debt, belonging interests and other receivables, totally or partly;
     
   • total or partly debt releasing for purpose of the creditors paying off by the assets realized through the capital or property sale of the subject undergoing privatization;
     
   • other changes relating to the subject to be privatized and its subsidiaries, by which is enabled its capital and property sale.
   
   
3. State borrowers of the subject undergoing privatization ARE INVITED, i.e: public enterprises, Tax Administration, Retirement and Disability persons Insurance Fund of the RS, Health Insurance Fund of the RS, Directorate for the goods reserves of the RS, Development Fund of the RS, other state bodies and agencies, as well as the Deposit Insurance Agency, when it is engaged as the bankruptcy or liquidation administrator over the banks in bankruptcy/liquidation, and when it administers the receivables of the RS due to undertaken foreign liabilities on behalf of the state, to report on their receivables, according to the Article 20a of the Law on Privatization, as of December 31, 2004, to the subject undergoing privatization, within 15 days from the announcement date of this decision in the daily "Politika”, to the address of the privatization subject, stated in the Clause 1 of this resolution.
   
4. The entitlement to declare their receivables to the subject undergoing privatization, have also the other creditors in accordance with the Article 20, Paragraph 3, of the Law on Privatization.
   

Defined by the Article 9, Paragraph 1, Clause 7 of the Law on Privatization Agency, it is stated that the Agency, during the performance of the privatization proceedings, carries out the restructuring or directs the request to the body in charge for restructuring implementation, if it estimates, in accordance with the Article 19 of the Privatization Law, that the assets, i.e. property of the privatization subject, cannot be sold by the method of public tender or public auction, if previously the restructuring has not been carried out.
The restructuring as a part of privatization process, comprises, as stated under Article 19, Paragraph 2 of the Law on Privatization, the changes relating to the subject to be

privatized and its subsidiaries, by which the sale of its capital/property is enabled, in particular the following kinds of changes: statutory changes, legal form changes, internal organization changes, atc; the write-off of principal debts and belonging interests or other kinds of receivables, wholely or partly; total or particular debt releasing for purpose of settling the creditors by the assets originating from the capital or property sale of the subject undergoing privatization.

The Privatization Agency, in accordance with the a.m. legal regulations, has found out in this particular case, that the privatization process cannot be carried out in the existing statutory and organizational form and with the existing capital structure and the liabilities of the enterprise recorded, and, therefore, initiated the restructuring proceeding by the Decision on Restructuring.