Valuation of privatized companies in the transition economies: the case of Prishtina international airport

Abstract

The paper aims to capture the valuation problems associated with the privatization of state-owned companies in Kosovo. The methods used in the research detain, if the Prishtina International Airport was undervalued, overvalued, or properly valued in the leasing process. Privatization has been considered as the turning argument in the inclusive economic liberalization process that the Kosovo economy conducted during the transition period. The study comprises research on the factual data in the period 2010-2014 while the estimates on cash flow projections has been made on twenty-year period linked with the concession agreement of the Prishtina International Airport. The results of the study with the standard geometric progression and Monte Carlo simulation, show that the Prishtina International Airport (PIA) was undervalued in the leasing process.