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UPDATE 1-Slovenia to keep at least 25 pct of NLB, Krka and Petrol
May 14, 2015 / 2:11 PM / 2 years ago

UPDATE 1-Slovenia to keep at least 25 pct of NLB, Krka and Petrol

(Adds quotes, details, background)

By Marja Novak

LJUBLJANA, May 14 (Reuters) - Slovenia will keep a stake of at least 25 percent in the country’s biggest bank Nova Ljubljanska Banka (NLB), largest fuel retailer Petrol and drug firm Krka, the finance minister said.

Minister Dusan Mramor told a news conference after a regular government meeting on Thursday that no single investor would be allowed to hold a bigger stake in those firms than the state, to ensure the government had a say in key business decisions.

He said the government would also keep a stake of at least 25 percent in insurer Zavarovalnica Triglav, reinsurer Pozavarovalnica Sava and financial and tourism firm Sava, also with no other investor holding more.

Mramor said the European Commission had agreed NLB was “a systemically important bank” in Slovenia which is why the government would be allowed to keep a stake, although it has promised the Commission to gradually sell-off other banks.

Slovenia, which narrowly avoided an international bailout for its banks in 2013, has been reluctant to sell its major companies and the government still controls about 50 percent of the economy and 60 percent of the banking sector.

In 2013, the government earmarked 15 companies for sale. Four have been sold so far while bank Nova KBM and telecoms operator Telekom Slovenia are in the final stages of privatisation.

The government also said it plans to double the return on its ownership capital within three years and reach a return of 8 percent in the long run. It did not give return figures now.

According to local media, Slovenia gets negligible returns on its ownership capital, which stands at about 11 billion euros ($12.5 billion), or almost a third of the country’s gross domestic product.

In 2013, the previous government had to pour more than 3 billion euros into mostly state-owned local banks to prevent them from collapsing under a large amount of bad loans, avoiding the need for an international bailout.

The Organisation for Economic Cooperation and Development said last week Slovenia should pursue privatisation without the state keeping a controlling interest in firms that operate in competitive markets. ($1 = 0.8777 euros) (Editing by David Clarke)

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