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Business Briefs

Agreement reached over Russian debt settlement and S-300
Date set for bad debt bids; bank clean-up continues
SP insurer, bank put up for sale later this year
Education key to employment, says OECD head
Bank Act implementation delayed two months
SES Tlmače signs deal on China thermal plant plans
Two new investments to create 1,000 jobs

Agreement reached over Russian debt settlement and S-300

Slovakia and Russia agreed June 19 to a deal in which Slovakia will forgive $54.3 million of the debt owed to it by Russia - a penalty for going back on a contract in 1999 to import Russian S-300 missiles - while Russia increased the amount of money it would return this year to $95 million.
The missile system was originally ordered by the government of Vladimír Mečiar in August 1998, but was cancelled after the Mikuláš Dzurinda administration came to power 14 months later.


Date set for bad debt bids; bank clean-up continues

The state has set June 25 as the date for interested parties to submit bids for 13 billion crowns in classified credits transferred from state banks IRB, VÚB and SLSP to hospital bank Slovenská Konsolidačná last year.
The government launched a banking sector clean up programme in 1999, transferring 100 billion crowns of debt to Slovenská Konsolidačná and Konsolidačná banka prior to the three banks' privatisations.
It is unlikely that all the credits will be sold off, forcing the government to later cover the debts from its own coffers. Concerns have also arisen that unless at least 10% of the debts are sold, Slovakia may not meet the terms of an expected loan from the World Bank.


SP insurer, bank put up for sale later this year

An ad taken by the Slovak government in the Financial Times June 18 launched the sale of a 78.5% stake in state insurer Slovenská poisťovňa (SP), as well as a 72% share in the bank Istrobanka, which is controlled by the insurance house.
Potential buyers have until July 23 to ask for an information memorandum and until the beginning of September to express preliminary interest in both companies. Final bids will be expected on December 1.
SP's monopoly on compulsory liability insurance of motor vehicles will end next year.


Education key to employment, says OECD head

OECD General Secretary Donald Johnston, who began a three-day visit to Slovakia yesterday, said at a press conference that education and further reform were key to Slovakia overcoming problems such as unemployment.
Slovak unemployment currently stands at just under 19%, one of the highest levels in Europe. The country became the 30th member of the OECD club last year.


Bank Act implementation delayed two months

The date on which a recent amendment to the Banking Act takes effect has been delayed from July 1 to September 1, quieting fears the central bank would have been forced to remove the banking licence of Devín Banka, which is struggling to comply with new rules.
Under the new regulations, the central bank would be obliged to withdraw a bank's licence if its capital adequacy ratio fell below 2%. Devín Banka's ratio is believed to be below that figure, possibly even in minus numbers.
The bank, which has been charged with recovering millions of dollars in Russian debt to Slovakia, has said it is in negotiations with a Japanese investor. The investor is expected to raise the bank's capital upon entry.


SES Tlmače signs deal on China thermal plant plans

Slovak thermal energy firm SES Tlmače has signed an agreement with its Czech partners, Škodaexport, Škoda Praha and Škoda Energo, to create a consortium to negotiate with China on the construction of a power plant in Shen Tou. SES stands to earn 4.6 billion crowns from the 13.6 billion project.
The deal allows Česká exportná banka (ČEB), which is to finance the contract, to begin negotiations with a Chinese partner bank on conditions for financing the deal.


Two new investments to create 1,000 jobs

Investments from Emerson Electric and United Parts Slovakia, announced June 14, are to create 1,000 jobs, the companies have said separately.
Emerson has opened a hall in western Slovakia for ultrasound equipment that will employ another 500 people by the end of 2001, bringing Emerson's investment in Slovakia since 1994 to $30 million.
The first company to settle in a new industrial park in eastern Slovakia's Vrable, United Parts Slovakia also brought its 370 million crown plant on line. UPS expects to raise the number of its employees from 300 to 500 by the year's end.


Compiled by Ed Holt
from press reports

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