Cabinet decides on allocation of ST sale money
At its regular sitting on August 9, cabinet decided on the allocation of 25 billion crowns from the sale of 51% of Slovak Telecom to Deutsche Telekom. The ministers decided that 9.5 billion crowns would be used for previously approved development projects, 10 billion crowns would repay loans with a government guarantee that fall due this year, a further 3 billion crowns would settle debts in the health care sector and 1.06 billion crowns would be spent by the State Road Management Fund.
A further 500 million will be paid as a premium to the Deutsche Bank-led privatisation advisory group. The redemption of National Property Fund bonds held by municipalities will also swallow 745 million crowns, while 1.7 billion cronws will be returned to Slovak Telecom itself for shares held in Poštová banka.
Banks ignore low yields in T-bill auction
The seventh government bond auction to be held this year failed on August 9 after the Finance Ministry chose not to accept a single bid from the banking sector.
Banking sector demand in the auction was the lowest this year, amounting to a mere 1.5 billion crowns, with dealers saying that banks probably reconsidered their policies and refused to invest their available sources in state securities at such a low yield. The last auction of 364-day T-Bills, saw a yield of only 7.17%.
The Finance Ministry had planned to take 1.2 billion crowns to go towards financing the budget deficit, and is now expected to begin offering more attractive yields on the bills.
Compiled by Ed Holt