Business News

Agency Proposing Limited Privatisation of State Holdings

Ljubljana, 08 June (STA) - The Capital Assets Management Agency, the custodian of state-owned shares in companies, has proposed the reduction of many state holdings to a controlling share in a strategy that will be put to the government, the daily Finance writes on Wednesday. The authenticity of the document was confirmed by officials.

The draft strategy for managing state capital assets, which Finance obtained, envisages the privatisation of key state holdings, such as that in the NLB and NKBM banks and insurer Zavarovalnica Triglav, but under specific conditions, including that the state retain a controlling stake.

Dagmar Komar, which heads the agency, confirmed the existence of the document, which she said was a work-in-progress.

As part of efforts to finalise the document, the agency is holding talks with various ministries - today Komar met Economy Minister Darja Radic, who put forward a number of comments, which the agency will include in the final version.

Komar explained that the agency is only compiling the strategy, with the guidelines provided by the various ministries.

In line with the document, privatisation of NLB, the country's top bank, would include the sale of shares all the way up to 25% plus a share under the condition that this would allow the state sufficient control in the bank, otherwise it would keep 51% together with strategic partners.

Plans for the NKBM bank envisage a reduction in the current holding of 51.08% to a 25.1% share under the condition that international markets are stable.

Moreover, the agency wants to conduct the sale of NKBM only if it can fetch a price above EUR 30 per share, a four-fold increase on the current stock market price.

Finance says that the agency strategy envisages the privatisation of Zavarovalnica Triglav up to 25% plus a share in an international call to bids that would set the value of the insurer at 2.5-times the annual premiums collected.

State stakes would also be reduced to 25% plus a share in energy group Petrol and telecommunications incumbent Telekom Slovenije.

The agency is not said to be planning to maintain a long-term strategic holding in airport operator Aerodrom Ljubljana and wants to find a strategic partner for flag carrier Adria Airways following completion of restructuring.

The DARS motorway company is to remain in state ownership and private capital would only be invited into the ownership of Slovenian companies if this helped reduce state guarantees issued as part of the motorway construction project.

Meanwhile, the railways operator Slovenske zeleznice is to be transformed into a holding company operating four divisions, of which the cargo division would be available for full privatisation and there would also be the possibility to launch public-private partnership in the infrastructure division.

Slovenia's biggest power producer HSE and Gen Energija, which manages the Krsko Nuclear Power Plant, have been earmarked by the agency as strategic investments in which the state should retain an outright stake.

Asked by the press about how she comments suggestions that the agency did not include the ministry's views on the energy sector in the strategy, Komar said that Radic expressed a wish for only minor corrections in this area today and that the agency would include these in the final version.

While Radic was not present at the press conference, the Economy Ministry's Edia Granatir Lapuh said the ministry was confident that strategy would help inject order into the management of state share holdings.

The Capital Assets Management Agency is also not planning the sale of a stake in postal operator Posta Slovenije, fearing it would not be able to secure a good price.

It is considering rekindling the idea of a mega gaming and entertainment centre that would be built by gaming group Hit together with a strategic partner, which would be allowed 49% in the centre.

Meanwhile, Komar announced that the agency is already preparing the sale of a number of minor stakes, but she said that it needs final approval from the Finance Ministry, which needs to adopt a timetable for the sales.

She added that the final version of the strategy should be ready for adoption by the government by the set deadline of the third week of this month.

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