State Agency Sells Slovnaft Shares at Half Price

BRATISLAVA (SITA) - The National Property Fund (FNM), the state privatization agency in Slovakia decided to sell 1.35 million shares of oil refiner Slovnaft at 460 SKK per share to a thus far unknown company Colorin, a.s. Žilina on Tuesday. Slovnaft shares are currently traded at about 900 SKK on the capital market in Slovakia, and their face value is 1,000 SKK. This means the FNM is selling blue chips of one of the largest industrial companies in Slovakia at about half their market value. The package represents approximately 10 percent of the company`s share capital. Until the middle of January, the FNM had these shares bailed in two repo transactions, which were originally to be repaid already in 1997. Due to liquidity problems the FNM was unable to buy back the package and in January 1998 it had to borrow 120 million USD (also intended for other purposes) to get the shares back. The FNM paid 757 million SKK to get the share package back. However, their sales price in the transaction approved on Tuesday is 620 million SKK. This means it would have been financially better for the FNM to leave the Slovnaft shares to its creditors then buy them back and then sell them below the bail out price. Apart from Slovnaft, the FNM also decided to sell 97 percent of Prvá novinová služba, the largest distributor of periodic press in Slovakia. The buyer is the printing house Danubiaprint, which prints most of periodical press in this country, and its o wners are considered close to the governing coalition. The sales price is 410 million SKK.