Serbia Pays 220 Million Dinars to Keep Tigar Pirot Afloat
President Aleksandar Vucic said the state covered Tigar Pirot with 220 million dinars over the summer and will accept any privatisation, provided the plant keeps running and keeps most of its staff.
The Serbian state paid 220 million dinars (~1.9 million euros) into Tigar AD Pirot over the summer months, President Aleksandar Vucic said in the village of Temska near Pirot. The figure had not been made public before, and it came with a warning that this kind of funding will not run indefinitely.
Vucic said the state cannot keep paying wages that were not earned on the market. That is why ownership of the plant is back on the table in Pirot.
“Over the summer months we gave 220 million dinars, only people in Serbia do not know that.”
He then said something that widens Belgrade’s negotiating room: “We will accept any form of privatisation.” His condition is that the plant keeps operating and that most of the workforce stays. Earlier state language was narrower and tied any incoming partner to one specific capital increase model.
How many jobs hang on the Pirot plant
Tigar AD and its subsidiaries employ 1,030 people, 177 of them in the subsidiary companies. Workers are mostly on the minimum wage or slightly above it, according to N1, so 220 million dinars across three summer months buys payroll, not development.
The plant next door shows the scale. Tigar Tyres, the tyre factory run by France’s Michelin, has grown to 3,000 employees. Two separate companies share a name and a town, but not an owner.
What the investor call asks for
Tigar AD published a call to interested investors earlier. The terms are set out as follows:
- a minimum capital increase of 10 million euros
- a deposit of 2 million euros, or a bank guarantee for the same amount
- a new share issue at a nominal and issue price of 100 dinars
Belgrade-based Hevea Global appears in the documentation as an interested party that filed a letter of intent. The call also settles the fate of nine subsidiaries: some are marked for sale, some carry on trading, while Tigar Americas Corporation and Tigar Partner Skopje are to be wound up.
Why does Michelin keep coming up?
Pirot Mayor Vladan Vasic, who met the president, pointed to Michelin inside Tigar Tyres as the working example of a strategic partnership and proposed finding a similar private partner for Tigar AD. The logic is plain: same town, same labour pool, yet one plant is hiring while the other waits for a decision on ownership.
The difference is that Tigar Tyres brought in a buyer with markets and technology, while Tigar AD is offering a balance sheet full of debt. Management changed in 2017, when Vladimir Ilic took over the plant, and the state regained ownership by converting debt into equity.
How 220 million compares with the inherited debt
Liabilities piled up over the previous decade stand at roughly 8.3 billion dinars (~70.8 million euros). The summer payment of 220 million dinars is under three percent of that, which shows state money is holding up wage payments rather than repairing the balance sheet.
The reorganisation plan calls for the cancellation of 8.15 million shares to cover losses exceeding the company’s capital. For existing shareholders that wipes out most of the book value before a new investor subscribes a single share. Even the 10 million euro capital increase does not close the gap: it covers about one seventh of the inherited liabilities, so the rest has to go through write-offs, conversion or asset sales.
The next measurable step is the response to the investor call, and whether any bidder accepts the headcount condition the president set out in Temska alongside the money.
