Following calls from economic analysts and trade experts to adopt strong measures that can attract foreign investors, the Slovenian government has announced what is seen as a drastic step to boost the struggling economy. The Finance Ministry has communicated the decision to transfer state capital assets onto the Slovenia Sovereign Holding. According to Finance Ministry State Secretary Andrej Šircelj, a transparent process will be in place to conduct the sale.
During a press conference, the State Secretary further informed that price will be a major criterion for the sale. He added that investments will be categorized as strategic, important and portfolio. Explaining the implication of these investments, he stated that in strategic investments, the state will hold 50% plus one share. In the case of important investments, the state will hold 25% plus one while in portfolio investments, the holding will not have any controlling stake.
The government is planning to retain 25% plus one share in the Nova Ljubljanska Banka (NLB). For portfolio investments, it has shortlisted Abanka and Telekom Slovenije. Another name doing the rounds for sale is state-owned energy company Petrol, though the energy division of the company is exempt as a strategically important activity for the country.
SOD funds, KAD as well as the SID export, however, are expected to remain under full state control.
Once the policy draft is presented in the parliament for debate and adoption, it will be available for the public. The government has not yet finalized any deadlines for the sale and according to Šircelj, the government will take the interested buyers’ rating, strategy and business plan into consideration before giving its approval.
At present, Slovenia is facing a serious political crisis as two coalition parties have threatened to pull out of the government, creating difficult times for the ruling party. Although privatization plans are not expected to be annulled as the coalition parties had already been taken into confidence, a government collapse can bring matters to halt.
For the Slovenian economy, instilling confidence through foreign trade has become the need of the hour. In a recent statement, Goldman Sachs had recommended sale of state owned assets to attract foreign investors. The bank voiced its opinion on the need to accelerate the economy by undertaking some strong steps.
With the country engulfed in its political turmoil, it will be interesting to see how it handles privatization, which can be a stepping stone for its economy.