BELGRADE - Serbia said on Thursday that Italy's Fiat had agreed to write off 72.5 percent of a 42 million euro ($51.50 million) debt claimed against the nation's sole car-to-weapons manufacturer Zastava Group.
Predrag Bubalo, the minister for foreign economic relations, said the remaining 11.5 million euros owed to Fiat would be paid in the next 18 months after the government sells parts of Zastava, Beta news agency reported.
Bubalo said Serbia would not have to back the remaining debt with any state guarantees.
Parts of the Zastava Group, which also produces trucks and spare parts, could not have been sold because of the Fiat debt, he said. "We believe that after the debt forgiveness, potential partners would show a greater interest in the Zastava group."
In 2001, the government split up the Zastava Group spinning off more than 20 companies. The car unit and related plants remained a single entity.