LONDON - The European Bank for Reconstruction and Development (EBRD) and Slovakia's state privatization agency the National Property Fund (FNM) have reached an agreement under which the FNM will buy back the bank's stake in the Slovak oil refiner Slovnaft a.s, EBRD officials said on April 13.
The EBRD took a 10.5 percent stake in Slovnaft in 1995 when it bought half the refiner's 113 million issue of global depository receipts, which flopped on international markets.
The bank later offered the shares for repurchase and an agreement in principle was reached in talks between EBRD president Jacques de Larosiere and Slovak Finance Minister Sergej Kozlík, Slovak officials said.
EBRD alternate director for Slovakia, Tomas Parizek, told a country presentation at the bank's annual meeting in London that the agreement would "allow the FNM to redeem the shares from the EBRD at a price which is acceptable to the EBRD." He declined to give any details of the price.
When it bought the stake, the EBRD effectively paid the 1,000 Sk face value per share. But shortly afterwards the FNM sold a 39 percent stake in the refiner to a management-led group at an implied price of 156 Sk per share.
The EBRD has in the past expressed general concern at Slovakia's frequent practice of privatization through management buyout, saying the sell-offs are usually well below market value.
The FNM holds 25 percent of Slovnaft, which was initially privatized in the first wave of mass voucher privatization completed in 1993.
Author: Nigel Stephenson
