Business

12 Apr 2019, 14:15 PM

STA, 12 April 2019 - Prime Minister Marjan Šarec highlighted the port of Koper as the closest link between Central and East Europe, and China as he addressed the eighth summit of China and 16 Central and East European countries in Croatia's Dubrovnik on Friday.

In line with the bill, courts will have to weigh whether Banka Slovenije, the central bank, correctly applied the law in ordering the bailout, and correctly estimated bank losses.

Plaintiffs will be able to launch proceedings within ten months after the law enters into force. Banka Slovenije will be the defendant and if it loses, it will have to settle the damages from its reserves. If those do not suffice, it will be able to borrow from the state.

Banka Slovenije opposes the bill, in particular the solution under which it would have to pay damages if the courts establish to the plaintiffs were wronged, arguing that this would lead to unlawful monetary financing.

The central bank believes the law should state clearly that it is not responsible to pay compensation for the damage. A similar position is held by the European Central Bank.

The government rushed to endorse the bill at yesterday's correspondence session because the upper chamber of parliament, the National Council, was also preparing a similar bill, which however envisages the state launching procedures against Banka Slovenije.

"We rushed it, because we wanted the legislative procedure to start as soon as possible. It is possible that we will be merging the bill with the National Council's legislative proposal," Finance Ministry State Secretary Metod Dragonja said yesterday.

The National Council adopted its proposal today, arguing the government's bill fell short of what had been asked by the Constitutional Court.

The upper chamber's president Alojz Kovšca stressed that excessive procedural costs would discourage potential plaintiffs from suing Banka Slovenije, which means effective legal protection had not been provided.

The National Council would have Banka Slovenije sued by the state and the burden of proof transferred to the central bank.

Kovšca announced cooperation in the adoption of the final act, but added it would be vetoed if it failed to provide a realistic solution.

The bill will go through a regular procedure in parliament and the government is counting on it to be passed in June or July.

In the three months after the passage, special virtual data rooms envisaged by the bill would be set up by the Securities Market Agency (ATVP) where Banka Slovenije will give all interested parties access to information.

Potential damages are estimated between zero and EUR 963.2m, which is how much liabilities were wiped out by the banks which were nationalised in 2013 and 2014, plus extra costs.

The Finance Ministry said in presenting the bill that Banka Slovenije had decided for the measures independently and therefore carried the responsibility and liability for potential damages.

The legislation based on which the measures were taken has been found to be in line with the Constitution, so it is Banka Slovenije and not the state which is responsible for the way the legislation was implemented, the ministry said.

The ministry took into account the central bank's remarks regarding the setting up of data rooms, which it claimed would be too expensive, so the bill envisages the setting up of virtual rooms by the ATVP with the ministry only providing one room where computers and software will be available for accessing data.

But the ATVP warned in a letter today that it lacked the necessary know-how, money and staff to set up the virtual data rooms, so it would have to outsource them, which would require additional funding and a lot more time than the envisaged three months.

The agency also said it had no resources to decide on the potential thousands of applications for access to the data rooms, so it proposes that Banka Slovenije or the Public Administration Ministry take over the task.

In line with the bill, the court will decide whether there are grounds to award damages to plaintiffs and also set the amount of the potential damages, whereas in the original proposal Banka Slovenije was to determine the amount of damages, pending final approval by the court.

All procedures will be handled by the Maribor District Court, where Banka Slovenije will have to prove that it had reasons for the wipe-out and that it takes into account remarks regarding access to information and data protection.

Slovenia spent roughly EUR 5.5bn bailing out and nationalising the three largest banks in the country (two small banks were wound down) in a process seen as saving the economy from ruin.

However, subsequent revelations cast doubt on the methods used to value bank assets, which in turn determined how much capital banks needed and to what extent junior creditors were affected.

All our stories about Slovenia and China are here

12 Apr 2019, 12:30 PM

https://english.sta.si/2625564/uk-slovenian-chamber-of-commerce-panel-welcomes-brexit-extension

UK-Slovenian Chamber of Commerce Panel Welcomes Brexit Extension, Not Continued Uncertainty

STA, 11 April 2019 - Participants of panel on Brexit hosted by the British-Slovenian Chamber of Commerce agreed on Thursday that the deadline extension means more time for the best possible solution, meaning one based on a deal.

British Ambassador to Slovenia Sophie Honey believes the extension of Brexit until 31 October does not mean a prolongation of uncertainty but more time for the best possible approach.

UK Trade Commissioner for Europe Andrew Mitchell highlighted the close trade ties between the UK and the EU, pointing out trade with EU countries accounted for more than half of Britain's foreign trade last year.

He said a no-deal Brexit would have substantial consequences for the economy and agreed the extension provides an opportunity to reach a deal and enable the firm economic ties to be preserved in the future.

The UK wants a detailed free trade agreement with the EU that would cover customs and regulatory cooperation so as to allow companies to continue to trade in a similar fashion they are doing now, Mitchell said.

As for the Brexit-related developments in the British parliament, Honey spoke of the biggest challenge for the government in several generations, while Mitchell believes time will show that this was the "most profound democratic exercise".

Honey stressed on the sidelines of the event that the UK has been part of the EU for 45 years. EU membership touches on practically all facets of life, while the referendum result was 52% vs 48%, which is why she feels it is normal that an extensive discussion is under way now in the UK.

The uncertainty regarding future relations has so far not shown in the trade between the UK and Slovenia - Slovenian exports rose by 11% last year, while imports from the UK were up 15%.

However, similar growth should not be expected after Brexit, said the head of the Foreign Ministry sector for bilateral economy cooperation Iztok Grmek.

A number of companies who do business with the UK also attended the event, but they were left without concrete answers regarding what they can expect after Brexit.

One example is aircraft maintenance firm Adria Tehnika, whose key client is the British air carrier Easyjet.

"We participated in the transfer of a part of their fleet from the British to the Austrian registry last year, but part of the fleet remains registered in the British registry. The question is what this means in terms of customs duties and the license and whether we should seek a special license with the English registry," Adria Tehnika's commercial director Mirjana Tratnjek Čeh illustrated.

All out stories on Brexit are here

10 Apr 2019, 15:53 PM

STA, 10 April 2018 - Hunger for energy resources is almost as old as humankind, but the reasons behind it vary. The first to drill holes in the north-east Slovenia was the German army, and now the efforts to extract gas are driven by greed and the desire to make quick profit, says Delo in Wednesday's front-page commentary.

 

Quick profit is what British investors were promising to all those who wanted to invest in the project of exploiting the reserves of gas and some oil in the south-eastern-most part of the country.

They want to drill another 12 or 24 holes and use hydraulic fracturing to extract the gas and oil.

But people are distrustful. They used to have free gas and jobs, but now foreign investors came who only want profit.

They are using all means available to get what they want, including an agency to persuade the public and decision-makers, the British ambassador and a campaign and threats on social media.

Because of appeals, the procedure at the Environment Agency is slow. The agency has issued a permit for a planned gas processing plant, which will not be built anyway, but not yet a permit for hydraulic fracturing, which people oppose.

"The people have the feeling that the area along the Mura river cannot be seen very well from Ljubljana. Indeed, when it rained heavily in the capital, the area bathed in the sun."

People in Ljubljana are making plans to build dams on Mura and are stepping up pressure to exploit the natural resources in the area, although the people there want a green development.

"The gas that is coming out of the holes on its own is enough, the rest is just greed," Delo says in the commentary entitled ‘Gas for the Profit of a Handful’.

All our stories on hydraulic stimulation in Slovenia are here

10 Apr 2019, 12:36 PM

STA 10 April 2019 - As Slovenia's exports are slowing down after a record 2018, the country has started looking to Africa for new business opportunities, government officials told a business internationalisation conference at Brdo pri Kranju on Wednesday.

Slovenia needs to diversify its exports to markets outside the EU and find niche markets for high-tech products and services, according to Economic Development and Technology Minister Zdravko Počivalšek.

This year, the ministry will provide EUR 9.7m in cohesion funds for this purpose, he added, noting that Slovenia was among the few EU countries that were net exporters, its exports amounting to EUR 38.8bn in 2018.

Trade grew by 10% last year, reaching EUR 74bn, with more than half of the figure generated in Austria, Croatia, France and Germany, said Počivalšek, underlining the need to diversify.

"Africa remains an unexplored market, especially sub-Saharan Africa," according to Dobran Božič, a state secretary at the Foreign Ministry, which provides support to companies branching out to foreign markets.

"Africa is developing fast and the needs of its developing economy are enormous." In Africa, it is key that the state opens doors to potential exporters, as this is a signal to future customers that these are serious companies with serious plans, said Božič.

Prime Minister Marjan Šarec also said that the state would continue to support the economy by opening doors to foreign markets. But the government cannot do everything, he said, underlining the importance of cooperation and good organisation as well as the need to be proactive.

Africa has a population of one billion and a number of countries making a significant amount of investments, added Počivalšek. "The companies that have not yet entered Africa have missed a business opportunity."

Export diversification seems even more necessary in the face of Brexit, although a Brexit risk study for Slovenia shows that the country would only face problems in the case of a no-deal Brexit, according to Počivalšek.

But even in this worst-case scenario, the situation would stabilise after an initial shock following the UK's exit from the EU, according to the minister.

Foreign Minister Miro Cerar, meanwhile, underlined it was key for Slovenia to be an open country "not just in terms of politics but above all in terms of economy".

"Only by supporting our entrepreneurs in their efforts to enter foreign markets and attracting investors with good business models ... will Slovenia walk the path of a good country," said Cerar.

Entrepreneurs will have an easier time doing business abroad or with foreign partners in Slovenia if the country has a strong brand known for a good education system, science institutions, good judiciary and a good economic system.

Economy Ministry State Secretary Aleš Cantarutti told the conference that Slovenia aimed to see its exports grow by 5% in 2019 as well as in 2020, especially on the account of SMEs, whose exports are expected to grow by two percentage points annually each year.

He pointed out that services accounted for only 20% of Slovenia's exports although they accounted for 65% of the country's GDP, adding that there were still many business opportunities in this field.

The ministry will also focus on boosting foreign direct investments (FDI), which equal 32% of the country's GDP. This is relatively low, considering 65% in the Czech Republic and the EU average of 59%.

According to Cantarutti, Slovenia will focus on attracting FDI from Austria, Germany, Italy, Japan, Switzerland and the US, with the ministry providing about EUR 4m in incentives.

09 Apr 2019, 16:54 PM

NOTE: This story is published as received from STA, but Ascent Resources disputes the term “hydraulic fracturing”, aka fracking, and prefers “low volume hydraulic stimulation”

 

STA, 9 April 2019 - The environmental NGO Alpe Adria Green (AAG) announced it would not file an appeal against the environmental permit for a gas processing plant in Petišovci (NE). It had already said it would be hard to challenge it since the investor has been insisting it did not entail a stepping up of extraction via hydraulic fracturing.

The permit by the Environment Agency (ARSO), which was reportedly issued at the end of March, comes after the original permit for the refinery, issued in 2015, had been successfully challenged by environmentalists.

The AAG said in Tuesday's press release there would be no appeal as the permit covered only the refinery for raw natural gas, and was related to a modernisation of the existing facility under best available technology (BAT) aimed at reducing the environmental impact.

The NGO explained that the original application the UK investor Ascent Resources had sent to ARSO also covered the controversial technology of hydraulic fracturing, which the AAG believes would bring "catastrophic consequences for the local environment, like in the US".

What will be key as regards the refinery, which would be allowed to process 280,000 cubic metres of natural gas and a tonne of oil per day, is the ongoing environmental impact assessment determining whether the UK company can step up extraction via hydraulic fracturing.

ARSO made the decision that a separate permit procedure for hydraulic fracturing was necessary in March and is being challenged by Ascent Resources, which is also threatening to sue the government for damages.

Operating in a joint venture with Geoenergo, which is co-owned by the Slovenian state-controlled energy companies Petrol and Nafta Lendava, the UK company claims it has invested more than EUR 50m in the project so far. It holds 75% interest in the project, Geoenergo's concession for the Petišovci gas however expires in 2022.

Geoenergo told the STA that the permit meant that only one of the conditions had been met for the old infrastructure to be replaced with a new one to enable the refining of gas, which would be pumped into the national gas network.

Natural gas at the site is currently being extracted at the rate of 25,000 cubic metres a day, the company said, adding that the environmental procedures were under way for renewed stimulation of the existing well.

"When the administrative procedures for the existing wells get finalised, we will not exceed the capacity of the existing infrastructure. Our long-term goal is to cover around 10% of Slovenia's needs for natural gas."

Ascent Resources meanwhile said that the value of its shares had doubled since Monday, when it received the permit from ARSO. It added that Petišovci was a small plant, from which the entire production would go into the Slovenian network.

Executive director Colin Hutchinson stressed that the company still expected a permit for the entire project, including hydraulic fracturing, which according to Ascent Resources does not pose a major risk to the environment.

Total output at the location last month was 334,410 cubic metres for EUR 44,095 in revenue, while in 311,443 cubic metres were extracted in February (EUR 44,513), the company added.

All our stories on this project can be found here

09 Apr 2019, 14:27 PM

STA, 8 April 2019 - The tourism company Sava has increased its stake in hotel operator Hoteli Bernardin from 55.77% to 80.81%, while the Bank Asset Management Company (BAMC) reduced its share from 25% to zero, Hoteli Bernardin said on Monday.

Sava and BAMC have informed Hoteli Bernardin that Sava increased its share to 80.81% or 12,945,214 voting rights on 2 April, while BAMC reduced its share to zero voting rights.

Sava became the majority owner of Hoteli Bernardin, which owns six hotels on the coast, three apartment complexes and a campsite, in mid-February. The takeover was seen as a step in the consolidation of state-owned tourism companies.

Sava, whose main owners are the York Global Finance Offshore fund, Slovenian Sovereign Holding (SSH) and the state-run fund KAD, last year increased its stake in Hoteli Bernardin to 45.39% together with BAMC, the insurer Zavarovalnica Triglav and KAD.

It then acquired another 10% stake from BAMC to raise its stake to 55.77% before increasing it to over 80% last week.

The price for the entire 35.3% stake of BAMC in Hoteli Bernardin was the same as in the takeover offer, meaning EUR 1.26 per share, Sava told the STA today. This means Sava paid EUR 7.14m to BAMC for the stake.

Apart from Sava, Hoteli Bernardin is owned by the state-controlled Zavarovalnica Triglav (3.4%), KAD (0.02%), while a roughly 10% stake is held by Serbian businessman Miodrag Kostić, who got the bulk of his stake through the acquisition of the Gorenjska Banka bank.

The consolidation of the state's ownership of Hoteli Bernardin is seen as another step on the path to a state tourism holding that would control major tourism companies and possibly be sold in the future.

The holding is also to include Sava Turizem, Hit, Thermana, Terme Olimia, Adria Turistično Podjetje and Unitur.

09 Apr 2019, 12:24 PM

STA, 8 April 2019 - The Japanese robot manufacturer Yaskawa, the world's leading manufacturer of industrial robots, inaugurated a new robot factory and a European robotics R&D centre in the town of Kočevje (SE) on Monday, two years after construction was launched. The facilities are to employ some 200 people.

The EUR 25m investment has been co-funded by the state, which chipped in EUR 5.6m.

The director of the recently founded Kočevje-based company Yaskawa Europe Robotics, Hubert Kosler, told the press after the opening that the new factory would complement the production capacities in Japan and China, satisfying some 80% of the European market's demand for Motoman robots.

The new factory in Kočevje is expected to produce up to 10,000 industrial robots per year, manufacturing seven types of them. At the moment it employs 50 people and aims to double the number by next year. By 2023, it should employ some 200 people.

The president and executive director of Yaskawa Europe, Bruno Schnekenburger, said that the new facility was Yaskawa's response to the growing demand for industrial robots in Europe, Middle East, Africa, and Russia. The company is thus striving to localise its supply chains and reduce delivery periods.

Yaskawa also believes that the reconstructed railway line between Kočevje and Ljubljana will enable a quicker connection with the Port of Koper. Freight trains should start running on the railway in the coming days, according to the STA's unofficial information.

Addressing the opening, Prime Minister Marjan Šarec expressed satisfaction that the factory is located in an area that was often labelled as undeveloped and neglected part of the country. This sentiment was also echoed by Economic Development and Technology Minister Zdravko Počivalšek.

Šarec prised Kočevje Mayor Vladimir Prebilič as well as the previous government, for seeing the project through. He said that Slovenia had good relations with Japan and that these would only improve. "The best ideas are born in cooperation."

Yaskawa Europe regional director Manfred Stern pointed out today that the company's investments in Slovenia as well as recent investments Germany, France, and Sweden were the strategic part of Yaskawa's European initiatives set out in its global corporate goals.

Yaskawa had picked Kočevje as the location of its first facility for industrial robots not only in Europe but also outside Asia. Slovenia will also serve as the distribution nexus point for the robots manufactured in Japan.

The robotics R&D centre will improve the company's cooperation with local faculties and institutes. Yaskawa already cooperates with the Faculty of Mechanical Engineering and Faculty of Electrical Engineering as well as the Jožef Stefan Institute.

The company first entered Slovenia in 1994 when Yaskawa Electric took over the Germany-based Slovenian company Motoman Robotec. Two years later, it founded a company for robotic cells production Yaskawa Ristro in the town of Ribnica near Kočevje. Yaskawa Slovenija is also situated in Ribnica and manages the company's sales in Slovenia and other markets of the former Yugoslavia.

Stern signed a letter of intent with the Economy Ministry and the Kočevje municipality in May 2018, aiming to launch facilities for the production of electric motors and electronic components, which would create up to 250 jobs.

The investment is estimated to be worth EUR 20-30m, with the production being scheduled to start within two years.

08 Apr 2019, 12:41 PM

STA, 8 April 2019 - In the latest development in the controversial gas extraction project in Petišovci (NE), UK investor Ascent Resources has obtained the permit for a planned gas processing plant. However, according to Delo, things are not looking good for the investor in the separate permit procedure for hydraulic fracturing.

The decision by the Environment Agency (ARSO), which the paper says was issued on 28 March, comes after the original permit for the refinery, issued in 2015, had been successfully challenged by environmentalists.

However, key for the refinery, which would be allowed to process 280,000 cubic metres of natural gas and a tonne of oil per day, will be the ongoing environmental impact assessment determining whether the UK company can step up extraction via hydraulic fracturing.

The refinery permit is still subject to a potential appeal by Alpe Adria Green, but the NGO's president Vojko Bernard told Delo it would be hard to challenge it, since the investor has been insisting the refinery did not entail a stepping up of extraction via hydraulic fracturing or fracking.

ARSO made the decision that a separate permit procedure for hydraulic fracturing was necessary in March and is being challenged by Ascent Resources, which is also threatening to sue the government for damages.

Operating in a joint venture with Geoenergo, which is co-owned by the Slovenian state-controlled energy companies Petrol and Nafta Lendava, the UK company claims it has invested more than EUR 50m in the project so far. It holds 75% interest in the project, Geoenergo's concession for the Petišovce gas however expires in 2022.

All our stories on Ascent Resources can be found here

08 Apr 2019, 09:53 AM

STA, 5 April 2019 - The boss of Slovenian air carrier Adria Airways, Holger Kowarsch, has told the STA the failed deal with Russia's Sukhoi Civil Aircraft Company (SCAC) to lease Russian planes would also have involved an around 10-million-euro capital injection. Adria is thus still looking for a strategic partner.

Kowarsch, general manager of the Slovenian company in German ownership which had some liquidity problems recently, said it had been Adria that exited the deal.

After preliminary contracts were signed, SCAC did not deliver when the payment deadline was due in end February, for which reason Adria quit the deal, he explained in an interview for the STA on Friday.

Earlier this week, Adria announced it would not expand its fleet with 15 Sukhoi Superjet SSJ100 planes, as it had failed to agree on the terms of the long-term lease.

It said on Tuesday it doubted SCAC's interest in a fair and stable long-term partnership and was worried about its lack of a common vision of further strategic development.

Meanwhile, SCAC said in a release on Wednesday it had opted against entering the deal due to Adria's poor financial standing, in which way it avoided potential losses.

According to Kowarsch, Adria was in talks with SCAC for almost ten months, the Russians had access to all business information and carried out an extensive due diligence.

He also noted Adria had never denied it would post a loss for 2018, which he said will amount to a two-digit figure in terms of millions of euro.

Despite a planned recapitalisation of around 10 million euro, Kowarsch said it had not been agreed yet what stake SCAC would get in the Slovenian air carrier.

However, EU law limits the stake of investors from third countries in air carriers to 49%, he explained.

Kowarsch said Adria had been at first disappointed as it considered the Russian company a good opportunity for the air carrier.

But he also said that in recent meetings with Adria's partners in Europe and the US, he received information which put SCAC in a bad light as business partners.

"We need a partner we can rely on and with which we can find common ground on Adria Airways's future development," he said.

Adria's owners, among them German fund 4K Investments, believe Adria still needs a strategic partner, and is already in talks with potential investors, but Kowarsch said there was no hurry.

He noted that after it was supplied with four million euro at the end of 2018, Adria is fit in terms of capital so there is no need for a new capital injection.

This is why he does not expect any more problems with the Civil Aviation Agency, which periodically checks their financial standing and had ordered K4 Investments to recapitalise Adria last year.

Kowarsch also said that contrary to some media reports, the recapitalisation was carried out in cash.

While there were still some liquidity problems last winter, the prospects for the summer season are good so Adria expects a two-digit growth in passengers.

The plan for this year is to get out of the red, Kowarsch stressed.

Last year's loss is a result of several factors, among then damages Adria had to pay for cancelled flights and delays, dearer fuel, problems with staff and a slow introduction of Saab's 2000 planes.

Kowarsch stressed that despite all the problems, the safety of passengers on board Adria planes has never been at risk. He noted that negative publicity in some media outlets has caused the company quite some business damage.

Adria will most probably lease Canada's Bombardier's planes, Kowarsch announced, saying the 2020 summer season was now being planned so they would see what fleet they needed.

He also expects the number of passengers to rise in 2021, when Slovenia takes over the EU presidency for six months.

05 Apr 2019, 17:00 PM

STA, 5 April 219 - Slovenian companies will soon be able to do business on Amazon Europe, as the US tech company gets technically adjusted to include Slovenia among supported countries in the second half of the year, the Slovenian Ministry of Economic Development and Technology said on Friday.

Last year the ministry worked intensively with Amazon to enable Slovenian firms to do business on Amazon Europe's e-commerce platform as soon as possible.

At their last meeting in Brussels at the end of 2018 Amazon presented its reservations, but following further coordination a solution was found.

The ministry stressed it was aware of how important this commerce channel is for Slovenian firms, so it had pushed for a solution to be found as soon as possible.

It noted that Amazon had already launched the necessary investment to adjust technically to include Slovenia.

Amazon expects all solutions should be in place in the third quarter of this year, the ministry also said.

04 Apr 2019, 12:30 PM

STA, 2 April 2019 - The Slovenian provider of energy and sustainable solutions Resalta will get an EUR 6m capital injection from the European Investment Fund (EIF) and private investors. The resources will help the company make a transition from a start-up to a major international energy provider.

Resalta and the EIF, whose main shareholder is the European Investment Bank (EIB), signed the investment agreement on Tuesday, striving to further develop the company's independent energy services and renewable energy solutions, thus investing into a positive impact on Slovenia and the EU's economy as well as on the environment.

The investment will be guaranteed by the European Fund for Strategic Investments (EFSI), the key part of the Investment Plan for Europe, also known as the Juncker Plan.

Half of the recapitalisation amount will be provided by a joint instrument of the EIF and the Slovenian Development Bank (SID), with the other half provided by the Bulgarian BlackPeak Capital investment fund and private investors.

Resalta was established by three Slovenian major companies - home appliances maker Gorenje, gas wholesaler Geoplin, and the capital's public utility company Energetika Ljubljana - and is present in eight markets, including Slovenia, Bulgaria, Croatia, the Czech Republic, Italy, North Macedonia, Montenegro, and Serbia, doing business with individual clients, companies, and municipalities.

The company endeavours to assist its clients in reducing carbon emissions and energy consumption, saving on energy-related costs.

The EIF pointed out that the company has developed and implemented solutions that saved 300GWH of electric energy, thus reducing carbon emissions by 30,000 tons per year, which is equal to planting 3,400 hectares of forest.

Contributing to the City of Ljubljana's project, Resalta also reduced carbon emissions in a number of the municipality's facilities and was given the European Energy Service Award by the European Commission for this achievement.

The company's CEO Luka Komazec said that the investment was an important stepping stone to Resalta's development, helping them develop new energy service projects and transforming the region into a more eco-friendly environment.

Page 4 of 42

New Total Croatia Info Site

total-croatia-montenegro.jpg

Editorial

Photo of the Week

Photo galleries and videos

This websie uses cookies. By continuing to browse the site you are agreeing to our use of cookies.