Privatization Methods

The Croatian Privatization Fund utilizes two methods of privatization:

• Public Tenders
• Public Auctions

Public Tenders

The CPF privatizes companies in which it holds a significant ownership stake or those involved in strategic industries through public tenders.  The CPF has developed tender procedures designed to promote fair and transparent transactions.  The CPF’s tender and sales process includes the following steps:

A. The CPF publicizes the Public Invitation to Tender in the media, on its website (www.hfp.hr), and through email to various channels including embassies, chambers of commerce, interested parties and potential investors.
B. Interested and qualified bidders may purchase Tender Documentation and conduct due diligence.  Documentation contains:

• A Company Profile
• Tender terms and conditions
• Bid instructions
• Application forms
• Guarantee forms (bid guarantee and purchasing price payment guarantee)
• Standard sales and share transfer contracts
• Evaluation criteria
• Procedures for company visits

C. Bids must be received by the CPF not later than the deadline specified in the tender notification.  Public opening of the sealed bids is held on the deadline date for submission of bids.  A notary public records all bids.  Bidders or their authorized representatives may be present during the public opening of the bids.
D. The CPF’s Senior Executive Team, Management Board and the Government of Croatia evaluate the bids based on pre-determined evaluation criteria.
E. Contract signing.

In selecting the winning bidder, the key criteria is not only the offer price, but is also based on the proposals of the purchaser to develop and make further investments in the company as well as assume liabilities to employees and creditors.

The CPF is obligated to provide written notice regarding the outcome to all parties involved in the bidding process.

Public Auctions

The CPF sells shares of companies in which it holds minority stakes through public auction on the Zagreb Stock Exchange.

• Foreign and domestic legal and natural persons may acquire share ownership if they are represented by a registered member of the Zagreb Stock Exchange.
• Prices range from between 1 Kuna for companies facing bankruptcy to the nominal value of the appraised equity for more successful companies.
• Shares and business interests are paid exclusively in cash with a payment period of up to seven days from the transaction date on the Stock Exchange.
• A list of brokerage houses registered on the Zagreb Stock Exchange can be acquired from Zagrebacka burza (www.zse.hr).

Exceptionally minority holdings will also be acquired through auction at the Varaždin Stock Exchange for certificates which have previously been issued by GOC for the completion of Government works.

Bidding process