FNM says 10 billion Sk enough to reimburse bonds

FNM state privatisation agency president Ľudovít Kaník said on September 23 he believes 10 billion Slovak crowns will be enough to reimburse holders of privatisation bonds when they come due on December 1, 2000.

Slovak citizens have in their hands about 2.2 million bonds, now valued at more than 33 billion crowns, that were issued in 1996. In that year, 221,000 bonds (6.6% of the total issue) were paid off. In 1997, 445,000 bonds (13.6%) were redeemed, and in 1998 about 400,000 (12%) were paid off. Bonds with a par value of 10,000 crowns are valued at 12,244 crowns this year.

If the FNM's plans materialise, proceeds from the upcoming sale of so-called 'strategic' companies could be used to pay off the bonds, while other bondholders might be convinced to exchange their paper for holdings of equal value in the state companies that remain in the FNM's portfolio.

An amendment to the large-scale privatization law passed by parliament on September 16 allows the proceeds from sales of state companies, or stakes in the companies themselves, to be used to compensate FNM bondholders.

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