The UAE's Etihad Airways is nearing an agreement over an equity investment in loss-making Serbian flag carrier JAT Airways, the Belgrade-based Blic newspaper has reported.

Serbia is aiming to offload loss-making state firms, including JAT, Galenika pharmaceuticals and the Zelezara Smederevo steel mill, to keep 2013 budget deficit at about 4.7 per cent of output and secure growth of up to 3 per cent.

Last month, Etihad and JAT signed a preliminary agreement over a possible equity investment, pending due diligence and regulatory approvals.

Earlier, Serbia's Deputy Prime Minister Aleksandar Vucic said he was hoping for a successful deal with Etihad, adding that JAT Airways should be renamed Air Serbia.

Blic said talks between Etihad and JAT also involved purchase of maintenance company JAT Tehnika and JAT Catering. The deal could be signed within two weeks, the report said.-Reuters