Privatisation in Slovenia Has Raised Almost €1bn Since 2012

By , 26 Nov 2018, 11:45 AM Business
Privatisation in Slovenia Has Raised Almost €1bn Since 2012 pixabay.com geralt CC-by-0

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STA, 24 November 2018 - The state budget generated almost one billion euro in revenue from the privatisation of state assets in the last six years, with the recent sale of a 65% stake in the NLB bank actually representing the bulk of it. Among the most profitable years were also 2014 and 2016, when the state sold some major investments.

With the share of the country's largest bank sold at EUR 51.50 at the recent IPO, the state received the proceeds amounting to EUR 609m.

Funds raised used to reduce debt and grow a demographic fund to pay for pension system

"The proceeds from the sale of the capital investment in NLB have been transferred to the budget and used for repayment of debt in accordance with the public finance act," the Finance Ministry has told the STA.

More than EUR 540m or 90% of the proceeds have been earmarked for debt repayment, and the remaining 10% have been transferred onto a special account of the ministry.

The money will be reserved for the planned independent demographic fund, which is a response to the demographic changes and which looks to ensure long-term stability of the pension system.

The special account for the demographic fund has been holding ten percent of the proceeds from all privatisation deals since April 2014, when the law on Slovenian Sovereign Holding (SSH), the custodian of state assets, entered into force.

A total of EUR 97m has been collected on the account so far.

Since 2013, when the National Assembly confirmed a list of 15 companies for privatisation, the national budget has received a total of EUR 983.7m in proceeds.

Before the SSH law entered into force, all proceeds were spent for repayment of debt, which stood at EUR 31.8bn at the end of last year.

Due to the economic growth Slovenia has been recording in the recent years, its share in the country's GDP has been decreasing, standing at 74.1% at the end of last year.

The recent history of privatisation in Slovenia

The first companies to be privatised were coatings maker Helios in October 2013 and medical laser maker Fotona in January 2014, followed by car electronics maker Letrika and Ljubljana airport operator Aerodrom Ljubljana.

Proceeds from the privatisations completed in 2014 amounted to EUR 119m.

In mid-2015, the state-owned owners of sports equipment maker Elan sold the company for a symbolic sum, with the new owners, Bank of America Merrill Lynch and Wiltan Enterprises, securing EUR 12m as a return of state aid received in 2008.

Aircraft maintenance company Adria Airways Tehnika was also sold in 2015 to the Polish Linetech Holding for around EUR 1m.

In the same year, the US investment fund Apollo and the European Bank for Reconstruction and Development bought NKBM, the second-largest bank in the country, for EUR 250m, while bread and pasta maker Žito was acquired by Croatia's Podravka.

The privatised companies from the list also include car parts maker Cimos, tissue maker Paloma, and airline Adria Airways.

All our stories on privatisation in Slovenia are here

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