STA, 3 December 2018 - In a bid to address future challenges in business, the government plans to upgrade the national asset management strategy next year to make Slovenian Sovereign Holding (SSH) the driver of economic development in individual industries and companies, according to Finance Ministry State Secretary Metod Dragonja.
The announcement came as SSH held its annual conference on Monday, with Dragonja pointing out that it was time to adapt the strategy, "after we've managed to form a consistent governance framework in recent years".
The state asset custodian will now gradually complete its denationalisation obligations assumed when it absorbed the Slovenian Restitution Fund (SOD) in 2014 and incorporate the Bank Asset Management Company, Slovenia's bad bank, in 2020 and 2021.
A new approach to the development of specific industries and firms
"Our vision is to make SSH capable of taking on an active role in encouraging economic development in Slovenia and become the driver of development in individual industries and companies. The new asset management strategy will be drafted with this in mind," Dragonja said.
SSH has provided the Finance Ministry with its recommendations for improvements, but now everything is in the hands of the government and the National Assembly, SSH head Lidija Glavina told the press on the sidelines of the conference.
According to the SSH management, the strategy will have to be tweaked in terms of goals and success indicators, and classifications of assets should be adjusted.
Currently, a major goal set down in the strategy is return on equity (ROE), which was to hit 7.1% in 2017 and is to stand at 8% in 2020.
SSH's ROE for 2017 stood at 6.5% last year, which is the highest yet but still below plans, which the management of SSH attributes to the rising share of important and strategic assets in its portfolio. Such companies have other priorities than creating ROE, the management pointed out.
Tourism and finance are easier than energy and transport
According to Glavina, the 8% goal in ROE is attainable in finance and tourism and economy, but it will be hard to hit 8% in energy and transport, which have the highest share of strategic assets.
Meanwhile, Dragonja pointed out that SSH will have its hands full in tourism, as the strategy for sustainable development of tourism envisages consolidation and restructuring efforts in the branch.
The state secretary also listed some of the future tasks for the state in corporate governance, including the transformation of pension fund KAD into a demographic reserve fund and a clear definition of its mission, investment strategies and goals.
Additionally, the changes to the 2019 budget implementation law bring provisions that will put state-owned companies that are not managed by SSH on the same foundations.
As regards SSH itself, 2019 will be marked by continued efforts to sell the remainder of NLB to up to 25% minus one share, and efforts to sell Abanka, with Glavina saying that the bank would be sold before the deadline expires in mid-2019.