Elektroprivreda RS going to the stock exchange, no money, citizens will pay the bill with more expensive electricity

SARAJEVO, (Patria) - "Elektroprivreda Republike Srpske" owed suppliers 171 million KM at the end of last year, current liabilities in most subsidiaries significantly exceed their current assets, collection of receivables within the holding is very poor, and it cannot collect 96 million KM for electricity from customers.

According to the report of the auditing firm "Grant Thornton", "Elektroprivreda RS", which received a qualified opinion, owed customers about 96 million KM at the end of last year, while its liabilities to suppliers amounted to 171.2 million KM.

However, this data should be taken with a grain of salt, as even auditors could not determine if it was completely accurate for some subsidiaries.

"The result of auditing and other procedures did not allow us to obtain reasonable assurance about the validity of the stated amount of receivables from customers in the subsidiaries 'Elektro – Bijeljina' and 'Elektrohercegovina'," the report states, adding that for 'Elektro – Bijeljina', they could not be convinced of the complete amount of liabilities to suppliers either.

Also, the audit found that the situation regarding mutual liabilities and receivables within the holding is inconsistent.

Thus, the business books of the Parent Company show receivables of 7.2 million KM from RiTE "Gacko", while this debt is not mentioned anywhere in RiTE's records.

Auditors also warned about the poor collection of total receivables between ERS subsidiaries.

They also stated that in most companies that make up the holding, current liabilities significantly exceed their current assets.

"The inability to collect internal receivables between holding members within the agreed deadlines and at all, and the lack of working capital can significantly adversely affect the ability of most members and the holding as a whole to regularly meet their obligations, and thus the potential inability to perform operational activities in an unlimited continuity," the audit report states.

ERS is also burdened by numerous lawsuits, and at the end of last year, it was sued for as much as 108.6 million KM.

There is also a large arbitration dispute that "RiTE 'Ugljevik'" has been conducting for years with "Elektrogospodarstvo Slovenije", worth 1.48 billion KM, which is the amount Slovenians claim from RiTE.

The total liabilities of MH "ERS" at the end of last year amounted to 647.35 million KM.

Last year, a loss of as much as 34.67 million KM was recorded at the holding level.

Production companies recorded a net loss of 13.38 million, distribution companies 30.39 million, the Parent Company showed a consolidated net profit of 9.1 million, and IRCE a net profit of 36,000 KM.

The main reasons for such a poor result, according to ERS, are unfavorable hydrological conditions, the COVID-19 pandemic, and the reorganization of electricity distribution companies.

Otherwise, as part of the reorganization last year, distribution companies signed agreements on mutual termination of employment with 798 employees, and paid compensation for incentive severance pay of 3.9 million KM and compensation for economic and social integration of employees of 28.1 million marks.

In order to obtain the much-needed money, "Elektroprivreda RS" plans to borrow through bonds on the Vienna Stock Exchange next year, writes Capital.ba.

This was confirmed yesterday by the Prime Minister of RS, Radovan Višković, who said that this is a good test for ERS to show on the international financial market whether there is interest in its bonds.