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Report Suggests State to Consolidate Ownership of NLB

Ljubljana, 21 September (STA) - The Finance Ministry believes that the state should consolidate its ownership in Slovenia's leading bank NLB, and raise its stake to 50% plus one share, according to a document obtained by dailies Dnevnik and Delo.

The ministry's positions on state ownership at NLB have been drawn up as the government prepares to debate a strategy for the management of the state stake in NLB soon.

The internal document suggests that the state should remain a majority owner in the medium term, but that now dispersed state stakes should be consolidated in the hands of four major owners.

Currently 19 state-run companies own a combined 48.58% stake in the bank. The ministry proposes the stakes held by smaller owners be bought by the state, the state-run KAD and SOD funds and insurer Zavarovalnica Triglav.

Ownership should be stabilised through an agreement on joint management of the stakes, whereupon the state would acquire additional shares to increase the combined stake to 50% plus one share.

To keep the majority stake, the state would have to participate in all future capital injections at the bank. This means that it would have to pay up at least EUR 217m in the planned EUR 400m capital raising.

The Finance Ministry sees no obstacles preventing the government to agree, at some point, an initial public offering with key investors, provided that it would keep a majority interest.

If the state later decided to reduce ownership to 25% plus one share, privatisation should be gradual and well considered, and an attempt should be made to involve domestic financial investors, Delo and Dnevnik quote the Finance Ministry's document.

The National Assembly is debating the issue of NLB ownership today as part of an extended debate on the prime minister's answer to a question by People's Party deputy Radovan Zerjav concerning the sale of state stakes in companies.

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