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Business Briefs

Ratings agency dents Slovak hopes for investment grade
Top firms in Slovakia see profits soar in 2000
Gazprom confirms interest in SPP gas utility
Devín banka requests capital raise to stave off NBS
Cabinet approves budget outline with 3.4% of GDP deficit

Ratings agency dents Slovak hopes for investment grade

A senior official from the Fitch ratings agency said June 12 for the daily Sme that Slovakia should not expect to be raised to investment grade this year due to rising fiscal and current account deficits.
The news is a blow to the government's economic ministers, and would go against the prediction of many analysts, who believed the ratings agency, along with others like Standard & Poor's and Moody's, would raise their ratings this year. Moving up to an investment grade rating would allow Slovakia to borrow money at lower interest rates.
All three agencies have in the last nine months raised their outlook ratings for Slovakia to 'positive', and have suggested that of all central European states, Slovakia is in the best position to receive a ratings upgrade in the near future.

Top firms in Slovakia see profits soar in 2000

The top 200 companies in Slovakia last year made a collective gross profit of 22 billion crowns ($540 million), over four times the figure from the year before.
Slovak subsidiary of the German auto maker Volkswagen Slovakia, which June 11 celebrated 10 years of operations in Slovakia, again topped the list as the largest non-financial company in the country, recording a post-tax profit of 3.7 billion crowns on revenues of 85.57 billion crowns.

Gazprom confirms interest in SPP gas utility

Russian gas giant Gazprom has officially confirmed its interest in the Slovak gas utility Slovenský plynárenský priemysel (SPP). The confirmation came as Germany's RWE Gas and Wintershall companies, along with a consortium of Germany's Ruhrgas, Italy's Snam and Gaz de France, said they would be interested in buying the entire 49% stake in SPP on offer. Cabinet confirmed at its regular June 13 sitting that it would indeed sell the stake as a single package.
SPP was due to be privatised at the end of the third quarter of this year. However, the state's advisor on the sale, Credit-Suisse First Boston, has said that a deal was unlikely to be closed before the end of the year.

Devín banka requests capital raise to stave off NBS

The central bank has received a request from private financial house Devín banka to allow an investor to raise its basic capital, thereby offsetting what had become a real danger that Devín would lose its licence under new capital adequacy rules.
According to a draft of the Banking Act being discussed in parliament, when the capital adequacy of a bank falls below 2% the central bank must withdraw the bank's licence. Devín banka's capital adequacy is believed to be below 2% and possibly even in minus figures.
The bank has confirmed that the new investor is Japanese, fuelling speculation that the firm Nomura would be entering the Slovak market. Nomura was this year at the centre of a scandal in the Czech Republic when the bank which it had privatised in the early 1990s, IPB, was put under forced administration.

Cabinet approves budget outline with 3.4% of GDP deficit

Cabinet June 13 approved a framework 2002 state budget with a 37 billion crown deficit, within 3.4% of projected GDP, Finance Minister Brigita Schmögnerová announced. Expected revenues are set at 212.4 billion crowns and expenditures at 249.4 billion.
The ministers have earmarked from expenditures 1.17 billion crowns for education and research and development, while 1.36 billion will be used to support employment and business activities. A further 3.59 billion crowns will be spent on housing while another 9.58 billion crowns is to be put into transport infrastructure.
Environment minister László Miklós did not vote in favour of the framework, claiming that the money allocated to his ministry was too small.

Compiled by Ed Holt
from press reports

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