STA, 3 January 2019 - A project to revamp a rundown sports stadium in Ljubljana (Centralni stadion Bežigrad) that was designed by Slovenia's best known architect Jože Plečnik appears to be dead after the investor pulled out following more than a decade of tug-of-war with the opponents of the project.
The Bežigrad Sports Park (BŠP) company, the special purpose vehicle established by one of the wealthiest Slovenians, Joc Pečečnik, in cooperation with the Ljubljana city authorities and the Slovenian Olympic Committee, has withdrawn its request for the environmental consent for the renovation, the Environment Agency has confirmed for the STA.
According to the Environment Agency, the investor requested to be removed from procedure on 21 December. The procedure was stopped on 28 December giving all the parties 15 days to appeal the decision, the agency added.
The news first broke as the civil initiative that has been campaigning for the preservation of Plečnik's stadium in its original form announced on Thursday that the investor had withdrawn its request for the environmental consent, a precondition for a building permit.
The initiative welcomed the decision, labelling the move a sign that the project is now dead and buried.
According to the initiative, the investor too must have realised that the project was unacceptable because it would have caused environmental damage as well as destroy Plečnik's heritage. Pečečnik, the main investor, was unavailable for comment today.
The group hopes this will pave the way for a new solution that would restore the stadium to its original form, so it could be used for recreational sports and various events.
The stadium in the Ljubljana Bežigrad borough was designed by Jože Plečnik (1872-1957) in 1923. Built in several phases, its covered landmark VIP box was not added until 1935.
It was closed down for renovation in 2008, about the same time when the Stožice sports complex, also featuring a new stadium, was built on the outskirts of Ljubljana.
The investors had to fight off opposition from the get go, with the latest blow coming in late 2017, when the Environment Ministry again retracted the environmental consent, previously granted by the Environment Agency, upon an appeal by the civil initiative.
STA, 3 January 2019 - Serbian businessman Miodrag Kostić is well on his way to become a key player in the tourism industry on the Slovenian coast. The owner of two major hotels now also owns more than 53% of the local airport operator, Aerodrom Portorož, according to the website of the Agency for Public Legal Records (AJPES).
Kostić controls Aerodrom Portorož through Hotel Palace Portorož, which recently acquired a 15.2% stake in the airport operator from port operator Luka Koper.
Hotel Palace Portorož bought a 30.5% in Aerodrom Portorož in 2017 and increased its stake to 38.2% in February 2018.
Kostić has also attempted to take over Marina Portorož, the operator of the only marina on the Slovenian coast, and late last year managed to undermine the state's plan to bring under one roof the key tourism infrastructure and consolidate it in order to sell at a higher price later on.
After taking control of Gorenjska Banka last year, he reportedly persuaded the bank's supervisory board to back out of an agreement to sell to the state-owned Sava, the largest tourism player in Slovenia, a 9.17% stake in Hoteli Bernardin.
Not only that, Kostić increased his stake in the hotel chain to over 10%, making it impossible for the state (which owns more than 84% in the chain) to squeeze him out under Slovenian law.
STA, 3 January 2019 - The Koper District Court sent famed motorcycle maker Tomos into receivership on Thursday after the Koper-based company failed to find a strategic partner to help it cope with liquidity issues.
The proposal for receivership was filed last November by Tomos employees after the company failed to pay their wages, contributions and the annual holiday allowance.
Since Tomos had neither contested being insolvent nor asked for a deferral, it is considered insolvent under the insolvency law.
"The court decided to send the debtor into receivership," says the court's decision, posted on the website of the Agency for Public Legal Records (AJPES).
The court appointed Štefan Veren the official receiver, giving creditors until 3 April to report their claims and secured debt.
When the workers filed for receivership, Tomos director and owner Iztok Pikl said the company could still be saved. However, he admitted it owed its employees two monthly salaries and the holiday allowance.
Pikl or his company MPO Kabel bought the manufacturer of motorcycles and scooters in 2015 from industrial conglomerate Hidria, which sold it as a non-strategic asset.
Hidria acquired Tomos in 1998, it briefly liquidated it in 2012 only to revive production later on.
STA, 3 January 2019 - The construction sector in Slovenia expanded for the second year in succession in 2018 and the Chamber of Commerce and Industry (GZS) expects the growth to continue in 2019 although at a slightly slower pace.
The value of construction work rose by 18% year-on-year in 2017, while it grew by 21.5% in the first ten months of 2018, data from the Statistics Office show.
"The growth was expected because the scope of construction at the end of 2017 was low despite the high growth of the sector," the head of the Chamber of Construction and Construction Material Industries at the GZS, Jože Renar, told the STA.
The value of work on civil engineering in the first ten months of 2018 rose by 21.7% from the same period a year ago. Work is under way both on road and railway infrastructure.
"Intensive road maintenance work is under way to make up for the backlog of recent years when the state reduced road maintenance to far below minimum ... Extensive renovation work is also under way on railways," Renar said.
The construction company Pomgrad, which built the Magna Steyr paint shop near Maribor and is currently working on three major infrastructural projects with partners, recorded good results in 2018. Its consolidated revenue for the year is expected to reach some EUR 160m.
The company is focussing on exports, having built a hotel in the Plitvice Lakes National Park in Croatia and a housing complex in Sweden in the past year.
"We made a big step primarily in internationalisation and have several important deals under way abroad. We also finished several major construction projects in the domestic market, among them the new Magna factory in Hoče, which we successfully built in an extremely short period of time," CEO Iztok Polanič told the STA.
Construction of buildings expanded by 20.8% in the first ten months of 2018. "Construction of buildings is on the rise, both for private and business buildings, where unlike in the civil engineering projects private investors prevail," Renar said.
The GZS expects growth to continue in 2019 but it is not expected to be double digit as in the last couple of years. "We're counting on growth in civil engineering section and in buildings to be comparable," said Renar.
Although Slovenia's economy has been expanding rapidly and all construction companies in the country are very busy, the construction sector faces many challenges and problems, Polanič said.
"A key challenge is definitely the lack of engineering staff, a problem virtually all construction companies in Slovenia are struggling with.
"Another challenge is the unpredictability of projects and investments, which makes long-term planning in construction extremely difficult," the Pomgrad CEO said.
According to Polanič, the company will this year focus on infrastructural and industrial projects, it also counts on several new calls for applications in roads and railway infrastructure.
"We are starting the new year quite busy and will start working on a few new projects ... It's important for our company to win projects that occupy the entire Pomgrad system," he said.
According to Renar, the GZS expects the state to adhere to the international rules on tenders in the future and avoid "risky non-transparent contracts."
The state should prevent unfair competition by companies that are not bound to respect the collective bargaining agreement of the constructions sector, he said.
Related: All our stories tagged "property" can be found here
STA, 29 December 2018 - Slovenia's growth momentum is expected to moderate in 2019 amid mounting uncertainty surrounding the global economic outlook. Trade wars are seen as the biggest external downward risk, but there are upward risks in the domestic environment as well.
Global risks and uncertainty have been increasing throughout this year, in particular those related to the protectionist policies of US President Donald Trump and the uncertainty about Brexit.
Speaking to the STA, Bojan Ivanc, chief economist at the Chamber of Commerce and Industry's (GZS) Analytics, has warned of the risk of Trump taking measures targeting Europe's car industry, in particular Germany's.
Ivanc believes there is a 50-50 chance for the US and EU to reach an agreement on the issue, but he also says that potential measures would have a major indirect impact on Slovenia, considering the major role that the automotive industry plays in the country's exports.
Given the political confusion surrounding Brexit in the UK, GZS analysts see a 20% likelihood of a repeat referendum or a reversal of the decision to exit the EU.
The likeliest scenario, with a 50% chance, is an interim agreement that would put off answers to key questions about the future relationship into the future. The GZS assessed the odds for a no-deal Brexit at 30%.
Ivanc says that trade wars are a much bigger threat to Slovenia than Brexit because of their impact on the automotive value supply chain and the knock-on effects on transport and construction industries.
The IMF, OECD and the European Commission project global growth to reach about 3.5% in 2019, which is roughly at the level seen this year and the year before.
However, a more pronounced moderation is forecast for Europe's largest economies, including Germany, whose economy is now projected to expand by 1.5% this year and roughly as much in 2019.
Asked how the trends could impact on the Slovenian economy, Ivanc noted that the most recent data on exports remain quite good, but added that some companies at the start of the automotive chain are already seeing a drop in orders for 2019.
A survey conducted by the GZS among businesses in the autumn showed that most still expected to increase their sales in foreign markets and more than one out of three plan additional hiring while half plan investments.
The key problem for Slovenian businesses today is home-grown, that is a shortage of experienced staff and the related pressure on higher wages and thus higher labour costs.
As a further internal risk factor Ivanc mentioned a slow growth in private consumption. New car purchasing is getting less intensive although it keeps strong, and the number of real estate transactions has fallen in response to an excessive price growth.
Slovenians are mostly keeping their surplus income as savings rather than spending. This could be a cause for concern considering that the contribution of external trade to Slovenia's growth over the next two years is projected to decrease and even disappear.
Ivanc sees domestic demand as an important internal risk to the expected growth in GDP, along with dynamics in the phasing of EU funds, also in connection with major infrastructural projects such as the new Koper-Divača railway.
The GZS believes that Slovenia's resilience to a potential downturn is quite strong, at least within a year or two. Corporate indebtedness is the lowest in a decade and liquidity levels are still high.
Banks are highly capitalised and are financed mostly from domestic savings deposits. Household debts have increased but remain at one of the lowest levels in the eurozone.
Despite this increased resilience, Ivanc would like the government to put in place a suitable and predictable legislative framework that would make it clear on time what it will do when tax revenue drops. He says the government should create sufficient fiscal reserves.
Most of the latest forecasts for the Slovenian economy project growth to slow down from about 4.5% this year to about 3.5% in 2019. Ivanc believes the rate is realistic but also says that surprises are possible in both directions so the interval of growth is between 3% and 4%.
Ivanc says that a positive surprise could come from the construction sector and from Slovenian consumers, who could increase their spending faster than projected.
Meanwhile, the GZS does not see a scope for a positive surprise in the external environment, but rather a likelihood of a slightly more negative scenario, in particular in the automotive chain segment.
STA, 28 December 2018 - Prices of shares listed on the Ljubljana Stock Exchange have fallen on average this year with the SBI TOP losing 0.18% in a year. Stock brokers closed EUR 337m worth of deals, which compares to EUR 347m in 2017.
In a release issued on the last trading day on Friday, the management of the Ljubljana Stock Exchange assessed 2019 as a successful year.
It noted that the value of the SBI TOP index exceeded 900 points for the first time in eight years, which it said indicated positive trends on the Slovenian capital market.
The index closed at 805.06 points today, which is 1.46 points or 0.18% down from the last trading day in 2017.
SBI TOP hit the highest value on 6 June at 907.58 points, falling to the lowest point on 20 December at 790.91 points. The shares of NLB bank were included in the index in December.
Trading volumes in 2018 totalled EUR 337.32m, which is a drop of 2.91% compared to the year before. Block trades excluded, turnover amounted to EUR 286.49m, an increase of 17.7% from 2017.
Most of the turnover, EUR 327.69m, was generated in shares, with bonds contributing EUR 9.63m.
The busiest month of the year was May with trading volumes reaching EUR 51.3m, mainly due to the takeover of household appliances maker Gorenje, while NLB's listing as the first new issue in more than a decade sparking an increased interest in Slovenian shares in the autumn.
Stockbrokers closed 38,108 deals this year, 24.4% fewer than the year before. The average value of a deal was EUR 8,852, 28.4% more than in 2017.
The issue of pharma company Krka remained the most active item, accounting for EUR 86.4m or over 25% of the total trading volumes.
The shares of chemical company Cinkarna Celje generated EUR 56.47m in turnover, the issue of insurer Zavarovalnica Triglav EUR 43.24m and energy company Petrol's EUR 40.64m.
Of the issues included in the index, the biggest gains were made by those of financial group KD Group (+536.7%), logistics company Intereuropa (+29.94%), insurer Zavarovalnica Triglav (+4.84%) and Krka (+0.52%).
The biggest fallers were the shares of the telecoms incumbent Telekom Slovenije (-28.81%) and port operator Luka Koper (-14.47%).
The total market capitalization of the stock market exceeded EUR 33.366bn. At the end of the year, 67 securities of 41 issuers were included in trading with a total market capitalization of shares of EUR 6.35bn.
This year, eight securities were delisted, while one new share and two new bonds were listed with a total issue value of EUR 1.52bn and two commercial papers with a total issue value of EUR 36.53m.
Gorenje was delisted after China's Hisense became the sole owner of the company, while NLB was listed on 14 November, after an initial public offering at EUR 51.50 per share.
NLB saw almost EUR 3m in volumes on the first trading day and by the end of the year it reached EUR 8.38m with the share closing at EUR 62 today, the highest since the listing and 9.4% above the official listing price.
As regards trading on the new MFT SI ENTER market, 58 securities were listed in 2018, which accounted for EUR 4.725m in turnover. The average daily number of transactions was 2.2, and the average value of each transaction was EUR 8,669.61.
STA, 27 December 2018 - The Constitutional Court has annulled the part of the health services act which stipulates that concessionaires should spend the surplus of revenue over expenditure for the performance and development of healthcare. The court agreed this encroached on the legal position of the petitioners and on their right to free business initiative.
The annulment, announced on Thursday, is related to the part of article 3 of the act which regulates the use of surplus generated by private companies and physicians with licenses to perform public healthcare services.
It says that public healthcare service "is being performed as a non-commercial service of general importance in a non-profit way, with the surplus of revenue over expenditure being spent on the performance and development of healthcare services."
The petition for the constitutional review of the act was filed by the Association of Private Practitioners and Dentists of Slovenia at the end of December 2017.
"This is only the beginning of a long period that will see us winning the battle in court and proving to the government that the concepts it advocates are not what the patients or those working in healthcare would deserve," the association's head Igor Dovnik said in response.
The Medical Chamber also welcomed the decision as confirming the provision harmed public services.
The chamber expects the court will also annul other contentious provisions in the act, in particular those limiting the scope of work for young doctors and for doctors employed both in private and public clinics, as well as provisions retroactively affecting already awarded concession licences.
As it received the petition, the Constitutional Court said that the provision limited the concessionaires and directly encroached upon the legal position of the petitioners.
The Constitutional Court said that the introduction in the national legislation of the term non-commercial service of general importance, which is a term in the EU law, did not mean that a public healthcare provider from the aspect of national law is no longer a non-commercial service.
"The term non-commercial public service under the Slovenian law is wider than the term non-commercial service of general importance under the EU law," the constitutional judges wrote.
When the amendments to the act were being adopted in parliament, reservations were also expressed by the parliamentary legal service, which wondered whether the definition of healthcare service as a non-commercial service of general importance was compliant with EU case law.
It had also noted that the Slovenian legal order did not define the term non-commercial service of general importance.
The Constitutional Court also assessed the provision from the aspect of the right to free business initiative, as it stipulates that public service should be non-profit and that surpluses from the operations should be kept in the public service.
"By preventing private entities from using the surplus from the activity for their personal needs, the legislator actually turned them into a non-profit legal form," it added.
"Limiting the freedom to dispose of the surplus very intensively narrows down the field of entrepreneurial freedom of private entities and encroaches upon their business initiative."
According to the court, such a measure is surely in the public interest to provide universal access to public healthcare services, but such an intensive limitation undermines one of the key incentives to perform the concession service.
As the reviewed encroachment upon the human right to free economic initiative outweighs the public benefit from it, the court has annulled the provision.
The association had also challenged article 42 of the act, which deals with the awarding of concessions and says that a concession is not a subject of inheritance, sale, transfer or any other form of legal transaction.
The court has ruled unanimously that the provision is not in violation of the Constitution. It said that a "concession to perform non-commercial public service is a right and not an authorisation in the sense of the law of obligations".
Asked by the STA to comment on the ruling, the Health Ministry said that it would comment once it received and examined the 26-page document.
STA, 24 December 2018 – Three years after being acquired by a foreign financial investor, Slovenia's sports goods maker Elan (website) has been sold to the Finnish-owned asset manager KJK. The sale is expected to be completed in mid-2019 once it gets the green light from the Slovenian competition watchdog.
Elan said in a press release on Monday that the owner, Wiltan Enterprises of the financial fund VR Capital, had signed a contract on the sale of the outright stake in Elan to a company owned by the Luxembourg-based KJK Fund III.
The company based in Begunje na Gorenjskem was bought by Wiltan Enterprises from state owners in July 2015 after years of financial troubles, and the owners have been looking lately to sell to a strategic partner.
Since 2015, the outgoing owner Wiltan Enterprises has reinvested almost EUR 10m in Elan, and despite fears of layoffs under the new financial investor, Elan's headcount in fact increased to some 800, CEO Jeffrey Tirman said in April.
Wiltan Enterprises announced the sale this spring as they received expressions of interest after the company, which has been producing sports goods for more than 70 years, posted good results.
The company best known as a producer of skis reported EUR 82.5m in group revenue for last year, an increase of 15% over the year before, as well as an increase in operating profit.
The new owner, established this year with EUR 250m in private capital, is focused on investments in the Balkans and the Baltic states and is already present in Slovenia with investments in several companies.
It belongs to KJK Management, a manager of alternative investment funds, which is also based in Luxembourg and was established in 2010.
STA, 21 December 2018 - Fraport Slovenija, the operator of the country's biggest airport, will log a record number of passengers this year, managing director Zmago Skobir told the STA in an interview.
When German airport operator Fraport acquired the state-owned Aerodrom Ljubljana in 2015, it promised to invest in infrastructure, development and jobs, and it has been delivering on its promise ever since, Skobir said.
"Ever since Fraport's arrival, the company's development and operations have skyrocketed. In 2014, we recorded 1.34 million passengers and EUR 32m in operating revenue. By the end of this year, we will have served 1.82 million passengers."
The number of passengers travelling through the Ljubljana Jože Pučnik Airport increased by 8.5% compared to 2017, but the increase was even higher in the previous two years, said Skobir.
Moreover, the number of employees went from 400 at the time of the takeover to 482 at the moment. The company also additionally hires temps when the need occurs, he said.
Fast growth also brings a variety of challenges, with Skobir saying that the company faced lack of staff, which was also overburdened.
"But we are aware that people are the key element in the services sector. A beautiful new terminal means nothing if the staff is unkind and unprofessional."
"We invest a lot to make our staff happy. This year, we will set up a pay system, also raising salaries by 15%. We are also looking for new staff. We are an attractive employer but the training takes a while and we aim to keep the staff, we want them to feel good here."
When asked about the reasons for strong growth, Skobir said that there were several, the main one being Slovenia becoming an increasingly popular destination.
Moreover, the airport has sufficient infrastructure to handle the increase in traffic and can respond with a good quality service at a competitive price. This is important because it is competing for travellers and airlines with six other airports nearby.
Adria Airways has made a considerable contribution to this because it is trying to restructure its flight network since it got a new owner, according to Skobir. He also expressed satisfaction that the airline has been doing well after ten years of struggles.
"But we'll see what will happen in the future. So far, cooperation has been exemplary and we expect the planned recapitalisation and other plans to go well."
"But it would not be the end of the world for the airport and Slovenia's connectivity in case of a different scenario."
When asked about the trends in aviation and expectations for the Ljubljana airport, Skobir said the airport will likely follow the upward trends expected throughout the industry. However, the strong growth will taper off and become more stable.
When asked whether the company was prepared to face the next economic crisis, which is expectedly around the corner, Skobir said the key was to invest in infrastructure, equipment, organisation and employees when the going is good.
"Fortunately, we have a strategic owner who operates more than 30 airports and understands investment cycles. All of the profits and accumulated assets... go into infrastructure, ensuring stable and steady returns over a longer period."
The airport operator is currently getting ready to start construct a new terminal. If everything goes according to plan, construction will start in the spring and be completed by the end of 2020, about half a year before Slovenia will assume the EU presidency in the second half of the EU.
Skobir is moreover happy with the development of the airport city, saying that a lot had happened in the past two years, since the local authorities gave the go-ahead to develop some of the land near the airport. He expects the airport city to be completed in the next three to five years.
STA, 20 December 2018 - Ljubljana Stock Exchange has had a diverse year as several companies, including household appliances maker Gorenje, were delisted. On the other hand, Slovenia's largest bank NLB went public in November. The overall trend has been somewhat bullish, as the SBI TOP index added 3.52% by the end of November.
The delisting of Gorenje, the blue chip that was acquired by Chinese Hisense earlier this year, as well as those of companies Mlinotest, Sivent, Zdravilišče Rogaška and Tovarna Olja Gea, was decried as bad news for the Slovenian capital market due to limited choice.
"We want more listings with every passing year, not fewer. It is key for the further development of the Slovenian capital market," said Aleš Ipavec, the chairman of the stock market operator LJSE.
"Development should be in the interest of all business and political stakeholders, because a developed capital market addresses many issues, including those in public finances and social affairs. These are indisputable facts in a modern market economy," he added.
Nevertheless, "trading at the Ljubljana Stock Exchange can be assessed as successful, and November IPO of NLB has certainly livened up the atmosphere".
The inclusion of NLB shares in the SBI TOP blue chip on 12 December will certainly "contribute to further growth in trading and to the interest in the stock of Slovenian public companies," Ipavec added.
NLB shares were listed on the stock market on 14 November, with turnover nearly hitting EUR 3m on the first day, but it has slowed down since. The share, which was privatised through the initial public offering (IPO) at EUR 51.50 per share, has traded at between EUR 53.10 and EUR 59.90 between 14 November and 12 December.
Looking at the price range, Urban Belič, a board member at brokerage Ilirika, said that a realistic price of the share "will depend on the bank's performance and the situation on financial markets".
Overall, Belič says that trends on the stock market can be divided into two periods this year. "At first we witnessed optimism of stock market players and gradual growth in share prices and turnover at the Ljubljana Stock Exchange.
"Then, after contentious statements by the Left and a deterioration on foreign stock markets we witnessed a decline in share prices and a significant drop in turnover," he said in reference to the Left's wishes to include capital and rent gains in personal income tax calculations.
"Recently, turnover has significantly dropped and has been below figures from previous years. Above all, we see a decline in major domestic and foreign institutional buyers," he added.
Turnover topped EUR 307.4m by the end of November, which compares to EUR 347.4m in the entire 2017. Market capitalisation of listed companies stood at EUR 6.3bn at the end of November, up from EUR 5.27bn at the end of 2017.
Ascent Resources, the UK-based firm involved in a four-year and sometimes heated dispute over permits for a fracking and gas-processing plant in Petišovci, Prekmurje, is about to raise the stakes with the threat of legal action against the Slovenian government. One recent issue in the case was a number of abusive emails that were sent by people claiming to be Ascent Resources investors to ARSO and the Environment Minister, a matter that is now receiving police attention in Slovenia.
Speaking to London South East, CEO Colin Hutchinson said that while Slovenia remained a high risk environment for foreign investors he was hopeful that the two permits needed for the project to go ahead would eventually be granted by the Slovenian Environment Agency (Agencija Republike Slovenije za okolje, ARSO).
You can see London South East’s interview with Mr Hutchinson below in which he discusses the emails, fracking, the possible legal action the firm may take, and his hopes for the future