A process of ownership transformation in BiH started in 1990. and was performed through a model of internal shares of employees employed in companies (“Marković privatization”) and stopped with a beginning of the war. A revision of the same privatization process determined cca 1,4 billion KM of shareholders capital, or cca 8% of total capital of FBiH.
Different from "Marković privatization", is selected and by privatization regulations framed a model of mass privatization in FBiH giving a possibility to citizens participation, privatization investment fonds (PIFs) and other investments, with an experience of countries which were in transition before, respecting certain specific moments caused by the war and war consequances in BiH. This model before all gives a possibility to use certificates as a way of payment, to buy a property, a share or total state capital of enterprises. With certificates citizens had initial position to realize their private ownership share of state capital.
Federation BiH determined five, and identified claims upon four basis::
Mass privatization as a model is used to change existing ownership structure over the state property, gives a possibility to all full aged citisens to take a property over the capital which so far was a public/state ownership.
Besides, it is important to say that rules for participation into privatization process are transparent, giving a possibility for the public to review all privatization sales. It is planned that privatization will be performed within a short period. So, a transitional period would be shortened for companies, making conditions to improve business activities and opening new working places. Equal participation is possible for all interested parties of privatization process. Privatization shall correspond not only with law but with a justice as well, as a higher moral cathegory, what makes implementation of this process necessary to be performed .
Mass privatization is known as a quick and a simple way of closing big economic programs of privatization, what transitional economies really need. Its basic risk is that a dispersion of property has no its adequate result of management efficency with privatized companies.
By a model of which a method of public offering of shares (POS) was a priority, is determined the same attitude to privatization for all companies, what brought frontal (not selective) implementation of privatization process. This model of privatization is finished in 2002. after the Second round, theThird (closing) public invitation for subscription of shares. APF announced totally three public invitations for subscription of shares within a period from 2000. to 2002..
Together with a method of public offering of shares, tender, as a metod of large-scale privatization shall be used only in special occassions, in cases of purchase of companies with a real expressed interest of strategic investors. However, as privatization through POS gives no possibility for a fresh capital flow, needed to settle liabilities which burden a great number of companies, recovering their financial status, not initiating a restructuring of companies as a precondition for their further servival, tender as a method of privatization started to have more significant place while selecting a way of privatization of state capital. Effects of this method of privatization are good as investors beside payment in cash for capital are obliged for investments and employment of existing and new workers.
Changes of legal regulations (Law on privatization of enterprises and Law on opening balance sheet of companies and banks) followed in the second half of 2006., gave a possibility to design a privatization process through organizationa restructurng of companies, and capital sale through Stock-market.
Privatization through a division into techno-economic units becomes actual in the recent phase of privatization. Namely, if there is no a purchase nterest for companies as a whole and when a division of companies into sustainable techno-economic units is possibče, a company management, an authorized agency for privatization and authorized ministry can initiate a division of companies for the sake of privatization.
Potential investors, authorized ministries, agencies for privatization and companies can be initiators of companies capital structure changes, based upon joint ventures.
Goals of privatization are:
- Contribution to a development of economic reforms and transfer into institutions and mechanims of trade economy,
- A return of lost markets and including in international markets of capital and goods,
- Introduction into business activities of west standards and norms,
- Introduction of new technologies and contemporary organization of capital management
- Ensurance of state income releasing a state budget
- Inflow of foreign capital for economy revitalization,
- Development of competence, removing a market monopol of goods and services.