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Černák sees utility sales by mid-2000

Slovakia hopes to offer stakes in its power distribution and fixed-line telecommunications utilities by the middle of 2000, Economy Minister Ľudovít Černák said on June 8.
Černák, in London on an official visit, said the government hoped to complete a blueprint for restructuring the electricity sector by the end of July, converting the three existing state-run distribution firms into shareholder companies.
"We will offer stakes to foreign investors within the first half of next year," he told reporters, adding that the national power grid would remain in government hands. He did not say what the size of the stakes would be.

Slovakia hopes to offer stakes in its power distribution and fixed-line telecommunications utilities by the middle of 2000, Economy Minister Ľudovít Černák said on June 8.

Černák, in London on an official visit, said the government hoped to complete a blueprint for restructuring the electricity sector by the end of July, converting the three existing state-run distribution firms into shareholder companies.

"We will offer stakes to foreign investors within the first half of next year," he told reporters, adding that the national power grid would remain in government hands. He did not say what the size of the stakes would be.

The government has also said it will sell a 34 to 49% stake in the country's fixed-line telephone monopoly, Slovenské Telecomunikácie (ST), which became a shareholder company from the beginning of the year.

Černák said Germany's Deutsche Bank was acting as adviser on the telecommunications sale, and would report to the government by the end of June on a possible price and size for the stake. "We would like to privatise our telecom by the end of this year," he said. "Nearly every big player in Europe is interested in it."

Černák also said talks were under way with the World Bank on a loan to help restructure Slovakia's banking system. Finance Minister Brigita Schmögnerová said last week it was possible the country would seek World Bank funding of $80-100 million. "We hope agreement will take place at the end of July," Černák said, without giving further details.

He said the World Bank estimated the cost of restructuring the sector at 90 billion Slovak crowns ($2.06 billion).

The government has put the cost of recapitalising the three biggest banks slated for privatisation - VÚB Bank, Slovenská Sporiteľňa and IRB Bank - at only 18 billion crowns, but the International Monetary Fund has said this may be a serious underestimate.

The European Bank for Reconstruction and Development had already offered to take a role in the restructuring, Černák added.

He said the government was confident of strong investor interest in Slovakia's privatisation programme, which was recently widened to include all but a handful of companies considered of strategic importance (see article, page 1).

Analysts say foreign investor sentiment on Slovakia has improved significantly since last month, when the government introduced tough fiscal measures and presidential elections pushed authoritarian ex-Prime Minister Vladimír Mečiar off the political scene.

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