Business Briefs

Rail strike not averted, talks deadlocked
Only three ST bidders meet with ministry
Slovakofarma says 1999 net profit at 330 million Sk
Dzurinda gets involved in steel talks
FNM expects first Nafta payment in two weeks

Rail strike not averted, talks deadlocked

March 6 negotiations between Slovak Railways (ŽSR) management and representatives of the railway trade union strike committee ended in stalemate, even though talks went on for more than ten hours, said ŽSR spokesman Maroš Čikovský. The trade unionists, who originally demanded a 10% wage increase, agreed to 9%, which would translate into an annual 900 million crown burden for the railway. This was still unacceptable to railway management. Čikovský said ŽSR Director Andrej Egyed offered the trade unionists an increase in direct wages by 265 million crowns, still far below an acceptable level for the union.
Unionists must collect the signatures of 50% of railway employees before a strike can be called. While the unions have not yet collected the necessary figure, they still claim that a March general railway strike is likely.

Only three ST bidders meet with ministry

The most likely bidders in the April privatization of a 51% stake in Slovak Telecom (ST) are those whose advisors contacted the ministry to clarify draft privatization documents, said Deputy Telecom Minister Dušan Faktor on March 5. These companies are Telekom Austria, Deutsche Telekom and Dutch KPN Telecom.
The most critical point at the talks with bidders has been the issue of regulation. A new Telecom Law should appoint a body responsible for regulation, and the ministry has proposed the existing Telecom Office. Other points for clarification were guarantees, the decision-making process in the company and the fate of the 15% stake owned by the FNM national privatisation agency.
Faktor expected the privatization process to be completed in late June.

Slovakofarma says 1999 net profit at 330 million Sk

Slovakofarma Hlohovec, Slovakia's biggest pharmaceuticals producer, said on March 2 that it expected a net profit of 330 million Slovak crowns for 1999, a 45% improvement over the year before. Company spokesman Pavel Hraška explained that results might have been even better but for the negative impacts of the 7% import surcharge imposed in mid-1999. The company's consolidated sales increased 12% in the same time to just under six billion crowns.
Slovakofarma is the largest, oldest, and most important pharmaceuticals company in Slovakia. It is one of the six largest pharmaceuticals companies in central and eastern Europe. It places about a half of its output in the Czech Republic and exports its products to 25 other countries. Its majority shareholder is S.L. Pharma Holding GmbH Wien.

Dzurinda gets involved in steel talks

Slovak Prime Minister Mikuláš Dzurinda said on March 7 that he planned to ask the head of US Steel to make a final decision on whether or not to buy a stake in Slovakia's troubled steel maker VSŽ.
VSŽ has been holding talks with US Steel since late 1998, and the government is involved because it is one of VSŽ's largest creditors through tax arrears. "Before March 10, I will invite the president of US Steel, Mr (Paul) Wilhelm to Bratislava, because it seems to me it is time for a final decision," Dzurinda said after a meeting with VSŽ President Gabriel Eichler.
Eichler said offers from other bidders were being considered as well. "Most investors are interested in a majority stake in the company (VSŽ), and it will definitely be at least a controlling stake," he said. Dzurinda and Eichler refused to specify who the other bidders were. VSŽ has rejected several earlier offers from US Steel as too low.
In January, Dzurinda said the government looked to make a decision on a strategic investor for VSŽ by the end of March.

FNM expects first Nafta payment in two weeks

Cabinet on March 8 approved the conditions of sale of the FNM national privatisation agency's 45.9% stake in the Nafta Gbely gas storage firm. This approval means the FNM will get the first installment of 500 million crowns on the property within two weeks. FNM President Jozef Kojda said the fund wants to use the money to redeem the FNM bonds which replaced the coupon privatization scheme in 1996 and which mature on January 1, 2001.
The fund has said several times that if it has enough money it will try to buy as many bonds as possible on the market before they mature in late December.
After the first installment of the Nafta deal, which is worth a total of 1.1 billion crowns, the FNM's shareholder rights should be transferred to SPP (a state-run gas utility). Both companies originally planned the first installment for February 15, but payment was delayed due to holdups in the preparation of the final privatization draft.
The moment the first installment is paid and shareholder rights are transferred, SPP plans to restructure Nafta Gbely. After the acquisition of the FNM's 45.9% stake in Nafta, SPP will have in its hands 55% of the company.
The FNM and SPP agreed on the transfer of the Nafta stake on January 21. The SPP must pay all four installments by December 31, 2000.

Compiled by Keith Miller from SITA and Reuters

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