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Business Briefs

Ruling on Slovnaft-MOL merger by September 6
Mortgage loans 1.5% cheaper as of September
EuroTel reports H1 profit of 890 million Sk
Industrial sector records 22.7 bn profit for 1H00
Debts of state health facilities at 14.5 bn Sk in 1999

Ruling on Slovnaft-MOL merger by September 6

The Hungarian Antitrust Office will issue a decision concerning the merger of the Hungarian crude-oil refinery MOL and Slovakia's Slovnaft refinery by September 6.
Barna Szeman, vice chairman of the Hungarian Antitrust Office, said that Hungarian legislation on protection of competition is based on similar principles as in Slovakia. The merger can be banned if a market participant acquires or strengthens a dominant position on the market.
"The situation in Hungary requires detailed analysis as well, and we are in touch constantly with Slovakia's Antitrust Office," said Szeman, who labeled communication with Slovakia's Antitrust Office as good.
Slovnaft's share on the Hungarian market must be studied because the refinery controls 6% of retail sales in Hungary, not through its own petrol stations but through sales of fuels to other retailers. Szeman added that Slovakia's Antitrust Office will probably permit the merger under the condition that Slovnaft sells some of its petrol stations.
The Hungarian MOL announced the concentration on April 14, 2000, after it signed an agreement on strategic investment in Slovnaft in late March. According to the agreement, MOL will acquire a 36.2% stake for $262 million. It will acquire this stake by combination of a $150 million increase in Slovnaft's registered capital and the purchase of $112 million worth of Slovnaft shares. MOL should get this stake by the end of the third quarter of 2000. Two years after the subscription of new shares, MOL will have an option for further shares.
The two companies' share on the Hungarian retail market is estimated at 36%, and it should be 38% in Slovakia, 3% in Romania, and 2% in the Czech Republic. MOL and Slovnaft will jointly control refinery assets with a total capacity of 330,000 barrels per day.


Mortgage loans 1.5% cheaper as of September

State-owned Všeobecná úverová banka (VÚB) will lower its interest rates on mortgage loans as of September 1, with the lowest interest rate becoming 11.75% p.a.
VÚB, currently a leader on the Slovak mortgage market, is the second banking institution (after Slovenská sporiteľňa - SLSP) to have lowered mortgage interest rates. In the case of VUB, the new interest rates will apply to mortgage loans approved after September 1, because loans drawn before this date are covered by mortgage backed bonds issued with a fixed interest yield.
SLSP has decided to lower interest rates from the current 13.25% p.a. to 11.75% p.a.
The possibility for banks to acquire a subsidy for interest payments of 6% (valid for this year only) from the state budget makes mortgage banking even more attractive. Thus, clients can acquire a mortgage loan for about 5.75% with the subsidy. In the case of housing construction saving loans, interest rates oscillate around 6% p.a.
VÚB controls about 90% of the Slovak mortgage lending market. The bank has provided mortgage loans to over 1,400 clients so far, and has issued 550 million Slovak crowns' worth of mortgage backed bonds. Slovenská sporiteľňa has provided a total of 126.5 million crowns in loans to 168 clients thus far.


EuroTel reports H1 profit of 890 million Sk

One of two mobile network operators in Slovakia, EuroTel Bratislava, reported H1 sales of 2.7 billion Slovak crowns, a gross profit of 890.3 million crowns and operating profit of 244 million. The Q2 sales of the company were 1.41 billion crowns, and gross profit was 494.5 million crowns, up 58% year-on-year.
The net increase of EuroTel customers for 2Q00 was 53,596, which is a year-on-year growth of 357%. The company's final number of active clients was 362,110.
EuroTel Bratislava is controlled by Slovak Telecom, a subsidiary of Deutsche Telekom AG (51%), and by Atlantic West B.V., a joint venture of subsi0diaries of Verizon Communications.


Industrial sector records 22.7 bn profit for 1H00

Slovak industrial firms showed a profit of 22.7 billion crowns ($480 million) for the first half of this year, a 32.8% improvement over the same period last year.
Leading the way was the metallurgical industry and the auto industry and paper manufacturers, all of whom profited from improved economic conditions on European markets and thus a rise in exports. The companies which performed the best were those which had, through investments, prepared themselves to take advantage of the newfound export opportunities.
Experts do not, however, expect the growth to continue in the second half of the year, as rising production costs are expected to eat into industrial profits.


Debts of state health facilities at 14.5 bn Sk in 1999

The debts of state health care facilities and health insurers towards other entities in 1999 reached 14.5 billion Slovak crowns ($308 million), according to a report released on August 28 by new Health Minister Roman Kováč. The report indicates that the debts are the result of insufficient financing of the health
sector.
Money owed by state health insurance companies to pharmacies for prescribed drugs handed out to patients totaled 3.9 billion crowns, while state health car facilities such as hospitals owed drug distributors 3.7 billion crowns. A further three billion crowns was owed on health dues deducted from employees but not remitted to insurance companies.


Compiled by Tom Nicholson
from SITA

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