STA, 26 October 2020 - A special audit has found irregularities in eight of a total of 30 audited deals energy company Petrol concluded under the former Tomaž Berločnik-led management in 2015-2019. The auditor believes that some irregularities show the management could be liable for damages while elements of criminal liability have also been detected.

BDO Revizor audited 30 deals concluded between 1 January 2015 and 24 October 2019, when the three-member Berločnik management resigned "by mutual agreement".

Audited were the transactions in excess of a million euro concerning the acquisition and disposal of financial investments, other types of investments, and sponsorship contracts.

The report on the audit, which Petrol published on the website of the Ljubljana Stock Exchange on Friday, points to irregularities in the transactions concerning the companies Mbills, Zagorski Metalac, Petrol Beograd, Vjetroelektrarne Glunča, Petrol Hidroenergija, Atet, BH Petrol Oil Company, and Abciti.

These transactions involved acquisitions of ownership stakes in these companies, capital injections or registration of a new company.

They involved violations of internal provisions about compulsory supervisor approval and the absence of due care while the management also underestimated economic feasibility of certain deals.

BDO Revizor maintains that to prove the former management board has caused damage to the company, Petrol will have to seek opinion by various economics experts.

The auditor also detected elements which indicate that the former management possibly committed crimes.

"Given potential court proceedings, the circumstances of this segment of the audit have not been disclosed," the release said.

A decision on the audit was taken in December 2019 as the shareholders met to confront the former management with allegations of mismanagement in drafting plans for 2020-2022. Berločnik, however, claimed the management had to resign due to different views on Petrol's future strategy.

STA, 22 October 2020 - British company Ascent Resources has entered into direct negotiations with Slovenia in a bid to potentially settle the dispute over permits for the extraction of gas in the north-east of the country.

In an announcement made in a filing with the London Stock Exchange, Ascent Resources says the negotiations will be carried out on a strictly confidential basis.

The company says the negotiations will not prejudice its rights to pursue its investment treaty claim under the UK - Slovenia bilateral investment treaty and the Energy Charter Treaty.

Claiming that Slovenia is breaching its obligations under the two treaties to the detriment of the company's investments in Slovenia, Ascent Resources has formally begun procedures to start an investor dispute against Slovenia at international arbitration.

The request for arbitration cannot be entered after the expiry of a three-month period in which the parties can try to solve the dispute amicably.

According to explanations recently provided by the Slovenian State Attorney's office, request for arbitration can be filed after 23 October unless the dispute has been resolved by then. This is because the official notification on the existence of the dispute was handed to Slovenia on 23 July.

The company alleges that through Slovenia's violation of its obligations under the two treaties, it has sustained considerable harm, considering it has invested more than EUR 50 million in the development of the Petišovci oil and gas field.

The Slovenian Environment Agency issued a decision in March that an environmental impact assessment is needed before a permit can be issued for extraction of gas in Petišovci by re-stimulating two currently producing wells as planned by Ascent Resources and its Slovenian partner Geoenergo. The decision was upheld by the Administrative Court in June this year.

All our stories on Ascent Resources and Slovenia

STA, 15 October 2020 - Home appliances maker Hisense Gorenje has officially announced it will start producing TV sets at one of its former facilities in Velenje in January next year. The Chinese-owned company announced that the Hisense Europe Electronic TV factory will involve around 400 jobs in the first stage, 330 of which will be for production workers.

Hisense Gorenje wrote on Thursday that jobs will first be offered to workers from existing production facilities in Gorenje, meaning they will be offered redeployment. The vacated jobs will be replaced with new hirings, the company said.

Part of the staff will also be sought in other Hisense Europe companies, while external candidates will get a chance as well. The workers at the TV factory, which is to produce Hisense TV sets for the European market, will start with training on 15 December.

The factory is being set up in Gorenje's former HZPA production facility. Investment in the equipment is estimated at EUR 7 million.

The planned annual output at four production lines in the first stage is two million sets a year. Capacities and output are then expected to grow in line with market demands to almost four million sets a year by 2023.

Hisense Gorenje is convinced that the new factory will not only contribute to reducing unemployment in the region but will also boost innovation, expand production activities, sustainable development and increase competitiveness and internationalisation.

"Creating a larger number of new jobs in the Savinja-Šalek region has additional weight in the light of the restructuring of this coal-mining region. Additional development potential for the region is harboured by the possibility of setting up a local supply network, which is particularly important for the small business sector," Hisense Gorenje wrote.

The first announcement of a TV factory in Velenje were made in 2018 when Hisense took over Gorenje. Initially a brand new factory was announced worth several dozen million euros and archaeological excavation was under way on a 3.5-hectare location.

Meanwhile, the news was welcomed by the SKEI metal industry union in Gorenje, whose head Žan Zeba said the union "above all expects that all standards and rules valid in our environment will be respected, that Hisense will prove it could also be a socially responsible company". He also mentioned the need for a suitable wage as "the best possible advertisement.

Zeba is, however, concerned about the chance of the new hirings at Gorenje, meant to replace the redeployed workers, being for a fixed term, which would raise what is presently believed to be a 20% share of fixed term contracts at the company.

Meanwhile, Gorenje told the STA the company presently had substantially more orders than in the same period last year and that its capacities were filled until the end of the year.

Gorenje added that strict protective measures at the company had been preventing a spread of Sars-CoV-2, but the epidemiological situation in the country nonetheless presented a substantial risk as regards the fulfilling of the orders. Workers have been asked to behave responsibly outside the company as well.

STA, 16 October 2020 - Magna International, the Canadian-Austrian automotive multinational, announced it would start producing Fisker Ocean, an electric SUV, in 2022. According to unofficial reports by the Austrian Kleine Zeitung, the car would be assembled in Magna's plants in Graz, Austria, and in Hoče, near Maribor, starting off with 50,000 vehicles a year.

Magna has said in a press release that the car would be manufactured exclusively by Magna in Europe and that launch of production is slated for the fourth quarter of 2022.

Magna is yet to confirm the Kleine Zeitung's reports about assembly location, but the Maribor-based paper Večer corroborated the report.

Večer says that this is also the reason why Magna is rushing to get the relevant environmental approvals to expand its paint shop in Hoče, which would increase its capacity to 100,000 cars a year.

The paint shop in Hoče has been laid still in the spring due to the coronavirus epidemic, with the majority of its 200 employees working in Graz.

Kleine Zeitung cites unofficial sources that 50,000 Fisker Oceans a year would be produced by Magna in the initial phase. The paper comments that the deal has put Graz at the centre of e-mobility.

Magna president Swamy Kotagiri was cited in the press release as saying that the deal was "a great example of our strategy to leverage our strong portfolio to scale for future mobility needs and utilize our full vehicle engineering and manufacturing capabilities.

"This is a unique competitive position for us, particularly with new mobility players and original equipment manufacturers seeking to expand their electrified offerings," Kotagiri said.

A response also came from Slovenian Economy Minister Zdravko Počivalšek, who tweeted that cooperation with Fisker, the biggest competitor of Tesla, is a great opportunity for Slovenia to develop green sustainable technologies that will impact global markets and create entry opportunities for creative, green and smart companies.

Fisker, based in Los Angeles, was founded by Henrik Fisker, a reputable car designer who has previously worked with BMW and Aston Martin, among others.

STA, 14 October 2020 - Prime Minister Janez Janša, his Hungarian counterpart Viktor Orban and Croatian Foreign Minister Gordan Grlić Radman addressed a ceremony in the north-east of the country on Wednesday launching construction of a power line that will link the three countries.

The 80-kilometre power line between Cirkovce near Ptuj and Pince on the border with Hungary will establish a link between the Hungarian and Slovenian national grids and consequently Croatia's.

The EUR 150 million project has been almost two decades in the making, mainly due to lengthy zoning procedures.

Janša noted that it took ten times as long to prepare the project as it would to build it; ELES, the national grid operator, expects for the 2x400 kV power line to be linked internationally by the end of 2021 with the project to be fully completed with final details by the end of 2022.

[FOTO] [VIDEO] @JJansaSDS ob otvoritvi začetka izgradnje daljnovoda Cirkovce-Pince: Samo politična povezava, brez energetskih in infrastrukturnih povezav, je mrtva črka na papirju.https://t.co/JqapgFEXpY pic.twitter.com/RuT1UvuWbv

— Vlada Republike Slovenije (@vladaRS) October 14, 2020

"Unfortunately, we have terrible difficulties in Slovenia when it comes to the speed of development projects and their siteing, not so much with construction as with red tape," Janša said, adding that the project should serve as a further encouragement that procedures should never again take that long.

He said the power line was of exceptional importance not only for Slovenia but for a broader region despite the fact that electricity was being taken for granted, just like health before one got sick.

He thanked those responsible in Hungarian and Croatian institutions for making the project possible, praising excellent cooperation between the three countries during the first wave of the coronavirus pandemic in spring.

Orban labelled today's event as historic, not only because of the energy link between the two countries, but also because of a vital moment between the nations.

He said Central Europe was gaining on significance as the centre of development was moving eastward. "The EU is not just a German-French matter, it's also links between the countries that are gaining on value, which is making them a site of geopolitical games and interests of the big ones," said Orban.

He underscored energy policy and cooperation in the field as an important aspect that boosts the region's position. He predicted a further step in that direction as Slovenia and Hungary agree enhancing their gas pipeline and rail links.

The Croatian foreign minister said the power line construction was in the interests of the whole EU as the bloc sought to strengthen infrastructure links in Central Europe.

He said additional steps would be needed in the future to make the energy system reliable in the long term because the role of the sector would be vital for the EU's economic recovery.

ELES boss Aleksander Mervar said the power line would create the first cross-border link with Hungary's grid, thus increasing the system's reliability.

The project is valued at about EUR 150 million, of which EUR 50 million will come in EU funds.

After the ceremony, Janša and Orban met over working lunch for discussion on bilateral matters, topical EU issues and the coronavirus pandemic.

STA, 13 October 2020 - Slovenia issued EUR 1 billion-worth of 30-year bonds on Tuesday, the business paper Finance said in a report referring to Bloomberg data. Unofficially, the interest rate for the bonds is slightly under 0.5%, while the yield also stands at around 0.5%.

According to unofficial sources quoted by Bloomberg the interest rate for the issue is 50 basis points above the 30-year mid-swap rate, which stands at -0.005%. Bloomberg said this means a better result than planned, as the financial institutions commissioned for the issue by the state had expected 65 basis points.

Bloomberg said demand reached EUR 5.75 billion, while the yield is 0.493%.

Ministry said that compared to the country's portfolio, the bond has the longest outstanding maturity. Compared to previous euro-bond issues, this issue stands out in terms of its contribution to prolonging the average binding period of state debt, the lowering of average interest rate and the strengthening of investor dispersion, both in terms of geography and type.

Most investors, 22%, were from Austria and Germany, 14% from the US, 13% from the UK and France, 8% from Slovenia, 7% from Switzerland, 5% from Scandinavia and 16% from the rest of Europe.

By type, the majority of investors, 71%, were fund managers, pensions funds and insurance companies, and 21% of investors were banks, the ministry also said.

"The successful issue of the 30-year bond is proof that long-term trust has been established and that Slovenia remains an investment-safe country despite the challenges of the Covid-19 pandemic," the ministry added in a press release.

Barclays, BNP Paribas, Commerzbank, Goldman Sachs International, JP Morgan and Unicredit Banka Slovenija were mandated to manage the issue.

The same banks were mandated by the treasury last week to buy back two outstanding bonds with a combined value of EUR 2.6 billion that are due in 2021 as Slovenia seeks to reduce the interest it pays on its debt. Today's update on the basis of offers received is that Slovenia plans to buy back bonds worth EUR 172.98 million nominally in total.

Slovenia has raised almost EUR 6 billion this year through new bonds and supplemented existing issues, while also auctioning off a few T-bills. A major part of the funds went for measures related to the coronacrisis.

Despite the economic situation and increased debt, the interest rates on Slovenian debt have fallen. Moody's recently upgraded Slovenia's long-term issuer and senior unsecured bond ratings by one notch to A3 from Baa1, while Fitch and Standard & Poor's kept Slovenia's credit rating unchanged in recent months.

According to Bloomberg, Slovenia's longest bond issue (25 years) currently has a yield of 0.40% on the secondary market, which is the lowest yield in history for the country. The yield for 10-year bonds is meanwhile -0.10%.

When Slovenia issued a 30-year bond five years ago, the interest rate demanded by investors was 3.125%.

STA, 14 October 2020 - A total of 707 new Sars-CoV-2 cases were confirmed in Slovenia on Tuesday, almost a doubling of Monday's figure and a new record by far, which comes on 4,902 tests conducted, a new high as well as the positivity rate hit a record 14.4%, government data show.

"Today's data show the situation is getting increasingly serious (...) The situation calls for action, measures taken so far have not done enough to prevent the spread of the virus," government spokesman Jelko Kacin told the Covid-19 briefing as the government is meeting in the afternoon to adopt new restrictions.

According to him, Slovenia's incidence rate, a key EU-wide indicator that shows the number of infections per 100,000 residents in the past 14 days, has increased to 202.75 from 178.91 the previous day.

Covid-19 claimed two more lives, increasing Slovenia's death toll related to the disease to 175.

This was as the number of Covid-19 patients in hospitals increased by 30 to 210 despite 17 being discharged. As many as 35 patients, four more than the day before, now require intensive treatment.

Kacin said that the outbreak was spreading at care homes with several aged care facilities across the country reporting new infections.

Matjaž Jereb, head of the intensive care unit at the Department of Infectious Diseases at the UKC Ljubljana hospital, said the estimate was that one in every 150 Slovenians was infected.

STA, 13 October 2020 - The parliamentary Labour Committee prepared the fifth stimulus package bill for passage late on Monday. A few changes were made compared to the original proposal but the main tenets of the bill remain unchanged.

The bill extends the furlough scheme and the state will continue to cover the sick pay for quarantined workers, even when they are on sick leave because their children are in quarantine.

Sole proprietors and micro companies will once again be eligible for monthly income support, just like during the epidemic.

New bonuses will be introduced for workers in healthcare and social security. Those working directly with patients in grey and red zones, respectively for those with confirmed or suspected infections, will get 30% bonuses, and those assigned to new posts will get 20% higher pay. The opposition tried to increase these bonuses but was unsuccessful.

Several measures are planned to help prepare healthcare and social security institutions for a second wave of infections. One of them is the creation of a task force that will advise the institutes in case of infections.

The state will finance the purchase of protective and other equipment needed to curb the spread of Covid-19 in these institutions and also cover the loss of revenue if they are not able to implement all of their regular programmes.

The coalition fully adhered to the opposition calls for scrapping the transitional period for restrictions for doctors working both in public health and for private practitioners. Thus, doctors working in public institutions will be allowed to work for no more than eight hours a week in private practices as of 1 January 2021.

The committee also scrapped the provisions regarding obtaining and processing of personal data from the different databases of the Health Ministry and the National Institute for Public Health.

The opposition, however, failed with its calls to scrap provision allowing the government to restrict the gatherings of people not just in public but also in private spaces.

The coalition argued that the spread of the virus was not confined to public spaces. Several inspectorates will monitor the implementation of the measure, while police and security guards will get more powers.

To reduce the workload of GPs, the bill initially envisaged the option of sick leave of up to three days without a visit to the doctor, but the legal counsellor of the National Assembly opposed this. She argued that employees themselves could not set diagnoses, only doctors could.

The bill also introduces free flu vaccine for all citizens with health insurance.

To cut waiting times, the bill introduces a national call for applications enabling both public and private health providers to provide services financed from public funds.

The opposition sees this as a concealed attempt at privatising healthcare, but the coalition argued the main goal was to provide patients with fast access to medical services. The parliament's legal department finds the call controversial, and a step away from the public health service, which would be unconstitutional.

The opposition also objected to the proposal that only two labs in the country would be allowed to conduct microbiological coronavirus tests, saying this was creating a monopoly.

The government also heard criticism that the bill contained quite a few provisions that have nothing to do with coronavirus. One of them is the annulment of the single price for books act. According to a Culture Ministry official, this is to help publishers.

The opposition's proposal to scrap the provision failed, but opposition MPs did manage to water down the measure: it will be temporary and apply only until the end of April 2022.

Other measures from the bill are aimed at helping education, agriculture, infrastructure and prisons.

The state will finance the purchase of protective equipment for companies, educational and science institutions, while the self-employed who are unable to do their work during quarantine will be partly reimbursed for the loss of income.

The coalition also proposed a six-month extension of the guarantee scheme for liquidity loans to companies, i.e. until the end of June 2021.

Bus operators which were unable to work during the epidemic will be compensated by the state, while those offering public transport services will receive subsidies for the purchase of protective equipment.

The fifth stimulus bill also creates the legal framework for a new contact tracing app for mobile devices, which will also give recommendations to users on how to prevent the spread of the virus.

STA, 12 October 2020 - The recently established Slovenian-Chinese business council at the Chamber of Commerce and Industry (GZS) expressed concern in a public letter on Monday over the government's alleged plans concerning Chinese company Huawei.

According to unofficial information, the government could label Huawei a high-risk supplier in the coming weeks. A document obtained by the media shows that the initiative for this had come from the Public Administration Ministry and that the matter was still being discussed.

In the letter addressed to Prime Minister Janez Janša and the cabinet, the council, chaired by Žiga Vavpotič from the companies Outfit7 and Globaldreamvision, says that an open, stable, predictable business environment providing equal opportunities is crucial for good functioning of the economy, even more so in the period of post-pandemic recovery.

The leadership of the council also expressed concern that such a government decree would be an important precedence.

Suggesting that such a label would damage any company's reputation and "represent illegal discrimination of a company based on subjective criteria that cannot be measured", the council warned that such a government move would strongly undermine foreign investors' trust in the Slovenian business system.

Companies, both Slovenian and foreign, need a predictable business environment, so such sudden and unpredictable government decisions are extremely harmful, the council said.

It also pointed to the risk of damage for Slovenian companies if China decided to retaliate, and the damage that could be caused to the bilateral relations with China, which both countries have been building in recent years.

China has some strategically important investments in Slovenia, the council said, pointing to the household appliance maker Gorenje, owned by Hisense, while Slovenian companies have important investments in China.

The council stressed that the efforts for improving bilateral relations should continue, and that ways should be found for cooperation also "when we may not see eye to eye (politically)".

It called on the government to make a decision based on equal treatment of all business entities operating in Slovenia and taking into consideration Slovenia's economic interests in China.

Apart from Vavpotič, the list of signatories includes the council's deputy chairs Franjo Bobinac, the former Gorenje CEO, and Jure Tomc, whose company in Hong Kong offers assistance to companies entering SE Asian markets, Gašper Cotman from Huawei Technologies, founder and CEO of company Cosylab Mark Pleško, Saša Saje Wang from KF Finance and Daniela Voljč from the Ljubljana School of Economics and Business.

All our stories on China and Slovenia

STA, 8 October 2020 - Ngen, an energy system solutions company, launched its second battery storage in Kidričevo on Thursday. The EUR 15 million system, located near aluminium maker Talum and considered the biggest in the wider region, will store excess energy. It is similar to that the company has launched in Jesenice, near the Acroni steelworks.

Ngen boss Roman Bernard said that the power of connection of the Tesla-made battery was 15 megawatts and has a capacity of 30 megawatt hours. The company has developed its own software solutions steering all devices connected to the system.

"This is only the beginning. For now, we are only linked to the primary grid," he said, adding that the battery takes advantage of all effects of energy surges or drops in the grid. This is overseen by grid operator Eles, while Ngen carries out the service, he said.

"Battery storage will allow us to reduce deviations. These occur, for example, when solar plants produce excess energy on sunny days," Bernard illustrated at the opening, which was also attended by President Borut Pahor.

Talum, majority-owned by Eles, was chosen as a location for the battery storage because the company has the required infrastructure and appropriate connections to the grid, and uses a lot of power.

Talum believes the storage system will provide an additional level of energy security, allowing the facility to operate in case of short-term power outages.

On the other hand, energy from Talum's generators will be stored in the battery, which will allow the company to provide systemic services and help provide better stability of the grid.

The Talum launch comes shortly after Ngen, in cooperation with hardware retailer Merkur, launched the sale of Tesla household batteries. These are 6 kilowatt solar units with a battery capacity of 14 kilowatt hours.

Ngen was established two years ago. It was co-funded by Bernard and Damian Merlak who made millions by selling his cryptocurrency exchange Bitstamp in 2018.