Druhá obchodná lawyer Milan Ružbarský (left) haggles over Nafta with the FNM's Sklenár (centre) and Kaník.
The agreement was signed on August 23 by officials from the FNM state privatisation agency and lawyers for Druhá obchodná, the firm that controls Nafta Gbely. According to the terms of the deal, Druhá obchodná will return to the FNM the 45.9% stake it owns in Nafta, which it privatised in 1996.
The FNM, on the other hand, will not repay Druhá obchodná the 500 million Slovak crowns it gave for Nafta in 1996. Instead, the state will take on Druhá obchodná's outstanding debts to Tatra Banka and AG Banka, which amount to roughly the same figure.
Although the agreement took effect on the day it was signed, it is still not in force, meaning that the Nafta shares remain on Druhá obchodná's account. The 45.9% Nafta stake will not actually return to the FNM until the conclusion of the second part of the deal - that the Arad firm, which owns both Druhá obchodná and a sister gas storage firm named Nafta Trade, will be allowed to sell Nafta Trade to an unspecified buyer.
Throughout the day on August 24 and 25, representatives of the FNM, Druhá obchodná and state gas utility SPP debated the conditions of the Nafta Trade purchase. SPP General Director Pavol Kinčeš stated that the SPP was interested in buying Nafta Trade, but would pay no more than one Slovak crown for the priviledge, given the size of the firm's debts.
According to Slovak media reports, Arad had been demanding $20 million (860 million crowns) for both Druhá obchodná and Nafta Trade. The price later dropped to $9 million for Nafta Trade alone, but the SPP turned down the offer.
Economy Minister Ľudovít Černák, while charging the SPP's Kinčeš on August 20 with the task of reaching an agreement with Arad, ruled out the possibility that the SPP use taxpayer money set aside for new investments to rescue the private Nafta Trade from its deeply indebted situation. The firm owes a reported 3.3 billion crowns ($79 million) to its creditors.
"We can't allow the SPP to pay a high price for Nafta Trade, because the money would simply go into private pockets, and the SPP would be left to pay Nafta's debts from its own resources," said Economy Ministry spokesman Maroš Turek.
Ivan Chodák, an equity analyst with CA IB Securities, said that while "each side is right from its own point of view," Economy Minister Černák's position was the more easily defended. "Whatever SPP pays for Nafta Trade ends up in Poór's pocket, and Černák clearly doesn't want to be seen making profit for Poór," he said. "On the other hand, the SPP has to consider whether it's better off sticking to its guns or getting Nafta Trade for a few million crowns."
Under a plan announced by the Slovak government on May 19, the two Nafta properties were to be consolidated under one roof - a state-owned joint venture called SPP Slovakia. The JV was to have been owned 50-50 by the FNM and the SPP, with the former contributing the 45.9% Nafta Gbely stake to the undertaking and the latter kicking in 75% of Nafta Trade.
Nafta Gbely Director Arpád Demko, whose firm controls the remaining 25% of shares in Nafta Trade, said he did not think that SPP, with its "cash flow problems," was the right buyer for Nafta Trade.
If the SPP and Arad do not agree on the sale of Nafta Trade, the firm may be sold to Nafta Gbely. Chodák agreed that it was "realistic" for Nafta Gbely to consider buying its daughter company.
Also on August 20, the SPP and Nafta Gbely signed a contract for the first loan - 50 million crowns - out of a total 150 million crown bailout package approved for Nafta by the SPP's supervisory board. The loan was extended for the specific purpose of maintaining operations and saving jobs at Nafta Gbely.