The Slovenia Times

New state asset management strategy passed

The office building of Zavarovalnica Triglav, an insurance company listed as a strategic investment in the state asset management strategy. Photo: Tamino Petelinšek/STA

The status of several Slovenian companies with state ownership is being changed under an updated state asset management strategy that the National Assembly passed on 10 July. The document also provides a basis for construction of affordable public housing.

The strategy deals with 84 companies, 34 of which have the status of strategic investments where the state holds a minimum of 50% plus one share or one vote. These are mostly involving the energy and transport sectors.

Eight are labelled as important assets where the state keeps a minimum of 25% and one share or vote. Their activities are market-based, but the idea is to keep their main development elements within the country.

The remaining 42 are portfolio investments, where Slovenian Sovereign Holding (SSH) as the state asset custodian has free reign.

Telekom Slovenije upgraded to important asset

A major change compared to the current strategy is that the telecoms incumbent Telekom Slovenije is being upgraded from portfolio to important asset as the owner of the key communications infrastructure in Slovenia.

Although initially changes had been planned to downgrade the national postal operator and insurer Zavarovalnica Triglav, they both continue to be classified as "strategic assets" in the final version of the document.

Aluminium maker Talum, so far a portfolio investment, is being upgraded to a strategic investment.

The country's largest gas supplier Geoplin is being downgraded from important to portfolio asset, as the gas transmission system operator Plinovodi will fall under direct ownership of Geoplin's shareholders, the state and fuel retailer Petrol.

The petrochemical company Nafta Lendava is being downgraded from an important asset to a portfolio asset due to the prohibition of hydraulic fracturing in Petišovci in the northeast.

The steel group SIJ, where the state holds a 25% stake and where SSH does not have enough voting rights to implement its governing policy, is being downgraded to a portfolio investment.

The company Studentenheim Korotan, which manages a Slovenian hotel and student dormitory in Vienna, has become a strategic asset because it promotes Slovenian arts and culture, education and science, and provides services to students.

Bad bank's assets to be used for housing

The real estate of the former bad bank will pass from SSH to the state-owned real estate investment firm DSU, which is expected to use the properties or the money it makes from selling them mostly to build affordable public rental housing.

Projections suggest that 2,500 affordable rental apartments could be built by 2030 using those funds. Due to this new task DSU is having its status changed from important to strategic investment.

The government has made a pledge to build 20,000 flats in ten years, recently announcing a plan to provide €100 million a year for the purpose.

Separation of ownership and management of tourism companies

In tourism, the strategy provides for a separation of real estate ownership and tourism activity, with the entire activity to be organised as part of two major pillars, one around the Sava group and other around Istrabenz Turizem.

It will also be possible to transfer all other tourism assets, specifically the spa operators Terme Olimia and Thermana Laško and the hotel operators Adria Ankaran and Hit Alpinea, to those two pillars. Terme Olimia is being downgraded from important to portfolio investment.

The strategy also envisages renovation and upgrade of the accommodation facilities of state-owned companies by means of public investments, or by means of private investments by other providers in real estate indirectly owned by the state.

Aim to increase productivity

"The key economic objective of the document is to increase productivity, which requires SSH and companies with state capital investment to be more ambitious in their business strategies and to increase productivity or value added per employee, including by investing in sustainable energy sources, employees' development, their working environment, work processes and corporate governance, as well as by investing in research and development," Gordana Pipan, state secretary at the Finance Ministry, said in presenting the strategy.

The opposition voted against the document, questioning, among other things, why investments in the food processing chain were not better protected. The same issue was also raised by the Social Democrats (SD), a junior coalition party.

The current state asset management strategy was adopted in mid-2015, but since then major changes have taken place.

The 2015 strategy contained a list of 104 companies, of which 29 have been sold for €1.6 billion in total.

The data shows that despite these sales the book value of the state's shareholdings fell only by €400 million after 2015 to €11.2 billion at the end of 2022.

From 2015 to 2022, the state and SSH also received €1.7 billion in dividends, mostly from companies in the financial sector.


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