EBRD First Vice President Charles Frank said on March 22 that he still wanted Slovakia's state privatisation agency to buy back the 10.5% stake it sold to the EBRD in oil refiner Slovnaft in 1995.
The EBRD took the stake in Slovnaft by buying half the refiner's $113 million issue of global depositary receipts which subsequently flopped on international markets. The EBRD effectively paid the 1,000 crowns per share face value for the stock and was enraged when the state privatisation agency, the National Property Fund (FNM), shortly afterwards sold a 39% stake in Slovnaft to a management-led group for an implied price of 156 crowns.
"Problems of corporate governance need to be addressed in a very aggressive manner," Frank told jounalists. He added that the previous government's actions in authorising the sale of the stake to management at such a low price were both unreasonable to the EBRD and unfair to the Slovak people.
Slovnaft is the most heavily capitalised share on the Slovak bourse's SAX index, accounting for over 44% of the index's total weighting. On March 22, the issue closed at 600 crowns per share compared with a year low of 575 and a year high of 875.
In April 1997, the FNM agreed to buy back the EBRD's stake but the deal has yet to be put into effect. No price has been announced.