Secretary General of the Bratislava Stock Exchange (BCPB) Milan Sasik announced on May 7 that the stock exchange chamber had temporarily halted listing the shares of Slovakia's steel giant VSŽ, given the firm's inability to meet its financial obligations.
The chamber decided at its meeting on May 7 that VSŽ share listing would resume after the company proved it was able to meet its obligations. In response to the Stock Exchange move, VSŽ spokesman Jozef Marko said that taking into consideration the current situation on the capital market in Slovakia, he does not expect this step will have any negative effects of on the company. He described it as logically consistent with what the current price of VSŽ shares is reflecting.
VSŽ shares began this year on the BCPB floor at 179 crowns, and reached their "peak" in early February at 190 crowns. By the end of February, however, their price had fallen to 155 crowns.
In the second half of April the price of VSZ stock fell to 126 crowns, and closed the month at 155 crowns on average. On the RM-System floor, VSŽ shares were last traded at an average price of 160 crowns.
Though the company originally predicted its 1998 losses at 5 billion crowns, unconsolidated and unaudited 1998 results for VSŽ now indicate the loss is more like 11 billion crowns. In 1997 the company netted 595 million crowns. The steelmaker reported an unconsolidated loss of 1.359 billion crowns for the first quarter of 1999.
In early November 1998, VSŽ representatives admitted that growing problems in the global metallurgical industry had had an effect on their firm, and said they expected to end the year with a loss because of these negative developments. The company had also defaulted on a syndicated loan of $35 million arranged by Merrill Lynch. VSŽ's debts towards financial institutions now total about $500 million.
