Spectator on facebook

Spectator on facebook

VSŽ share repurchase blocked by BCPB

Trading of a total of 5.5 million shares in the giant steelmaker VSŽ shares was announced at the Bratislava Stock Exchange (BCPB) on November 26. The shares represent over 33% of the company's share capital.
Finance Minister Brigita Schmögnerová told journalists on Novemer 27 that the trades had represented an attempt by VSŽ Holding, a.s. to repay its debt to the state-run Slovenská Sporiteľňa (Slovakia's largest bank) and regain control over the shares it collateralized in Slovenská Sporiteľna in a repo transaction.
On December 1, however, the President of the BCPB Chamber postponed until further notice the settlement of five of the nine direct transactions with VSŽ shares. In those five transactions, almost 4.9 million VSŽ shares were transferred for 1.6 billion Sk ($44 million).

Trading of a total of 5.5 million shares in the giant steelmaker VSŽ shares was announced at the Bratislava Stock Exchange (BCPB) on November 26. The shares represent over 33% of the company's share capital.

Finance Minister Brigita Schmögnerová told journalists on Novemer 27 that the trades had represented an attempt by VSŽ Holding, a.s. to repay its debt to the state-run Slovenská Sporiteľňa (Slovakia's largest bank) and regain control over the shares it collateralized in Slovenská Sporiteľna in a repo transaction.

On December 1, however, the President of the BCPB Chamber postponed until further notice the settlement of five of the nine direct transactions with VSŽ shares. In those five transactions, almost 4.9 million VSŽ shares were transferred for 1.6 billion Sk ($44 million). At the same time, he blocked the issue of VSŽ shares pertaining to those five transactions.

The BCPB's moves mean that the VSŽ shares in question will remain collateralised in Slovenská Sporiteľňa, and thus under government control. The state owns a 91% stake in Sporiteľňa through the FNM privatisation agency, and secured managerial control of the bank through personnel changes at a shareholders meeting on November 26.

VSŽ, Slovakia's largest non-financial institution, defaulted on a $35 million syndicated loan from American bank Merrill Lynch on November 9. Conceding that the firm was in dire financial straits, VSŽ top management met with cabinet representatives on November 10, but rejected an offer of state help that was contingent on a major reshuffle to the company's leadership.

Schmögnerová said she considered VSŽ's latest effort to repay the repo transaction with Slovenská Sporiteľňa as a bad signal towards the company's creditors. "Creditors must realize that VSŽ representatives are defending their interests and property shares instead of settling their debts towards them," said Schmögnerová.

According to Schmögnerová, it is noteworthy that VSŽ management was able to find enough money for the repurchase of its shares, but does not have enough funds to bail the company and its 24,000 employees out of their precarious financial situation. Schmögnerová added that a special shareholders meeting summoned for December 11 would clarify the situation at VSŽ.

If Sporiteľňa remains in control of the VSŽ share package, said by bank officials to represent a 24 to 26% stake, it will probably act in the interests of the cabinet at the December 11 meeting.

Schmögnerová said that VSŽ was of strategic importance to the Slovak economy, and said that the government would strive to consolidate the situation at the company. She added that further cabinet decisions regarding VSŽ's current owners and managers would depend on whether they met at least a part of the demands presented by the government during the November 10 joint talks.

Slovak Premier Mikuláš Dzurinda was the first to raise the possibility of government intervention in VSŽ through the shares collateralized in Sporiteľňa during a speech at the Economic University in Bratislava on November 24.

Top stories

How to sell Slovak books to English readers

Slovak literature makes it to the big bookstores of London, but it is unlikely to become a bestseller yet.

On Wednesday, Slovak literature will be presented in one of the biggest bookstores in London. Among the new books translated into English is also the anthology of current Slovak prose selected and translated by Magdalena Mullek and Júlia Sherwood.

Slovakia vies for medicines agency

What chances does the country have at winning the seat of the prestigious European Medicines Agency that needs to relocate from London?

Illustrative stock photo

Vote-buying scandal lands village mayor in court

Some Roma claiming the mayor of Gemerská Poloma, Miroslav Michalka was buying votes, have changed their testimonies.

Stanislav Kučerák (blue shirt) is a key witness in the vote-buying case.

British embassy opens condolence book

The book will be opened for two days.

Floral tributes are laid out in Manchester, England, on May 23, 2017, the day after the suicide attack at an Ariana Grande concert that left 22 people dead as it ended on May 22 night.