SHIPPING firm SPaP went to the only bidder - the Penta Group-backed Dunajservis.
photo: Ján Svrček
The FNM privatisation agency announced on April 4 that Dunajservis had been selected to buy the agency's nearly 87 per cent stake in SPaP for Sk351 million, which is to be paid in a single instalment within 15 days of the contract's signing.
The announcement drew promises of legal action from another tender participant, and claims by one of the government's five member parties that the tender had been rigged in Penta's favour.
As part of the deal, Dunajservis and Penta must drop all legal action stemming from last year's aborted tender, which the firms also won, but which was aborted following allegations of impropriety on the part of tender commission members and the low price accepted.
Penta board member and co-founder Jaroslav Haščák said: "It is very probable that following the announcement of our victory, we will drop our suit."
The FNM reopened the tender for 86.99 per cent in SPaP in January, and by March had narrowed the field to two firms. However, in March the FNM ruled out Port Service Bratislava, which had reportedly offered Sk408 million, for not fulfilling tender conditions.
Port Service officials complained that they had been eliminated because of Penta's law suits against the FNM, originating from the first tender. Company chairman Pavol Pavlis said that Penta had been determined to win SPaP either through the tender or through the courts.
Port Service also accused Minipar Investment, the Canadian firm advising the FNM on the deal, of manipulating the tender. Minipar has threatened legal action over the allegations, and company director Harley Mintz said that Pavlis' comments "seriously threatened the good reputation of Minipar." Mintz added that Port Service had been excluded due to the insufficient backing for the loan it intended to take to make the SPaP purchase, an opinion rejected by Pavlis.
"I can't imagine unconditional promises [from banks]. Every loan agreement available has at least one basic condition - victory in the tender," said Pavlis.
"Tatra banka, at the request of the advisor, confirmed that they would grant the loan in spite of the ongoing [Penta] court case. This shows how much trust they have in the quality of our company and our shareholders," he said, adding that Port Service would pursue the matter legally.
The Hungarian Coalition Party (SMK), part of the present government coalition, also objected to Port Service's exclusion and other aspects of the deal. On April 3, SMK representatives asked the FNM to cancel the tender, and requested their coalition partners to intervene.
SMK Deputy Chairman László Gyurovszky said that besides what he called the non-transparent exclusion of Port Servis and pending law suits between the FNM and Penta, the amount offered by Dunajservis was not significantly higher than they had offered in the first tender, which was cancelled in part due to the low price.
"If the FNM allows tenders where one of the participants has an advantageous position and, moreover, uses destructive methods, it is called racketeering," said Gyurovszky.
The FNM's Lesajová responded: "The fund decided about one company only. Port Service was excluded because they did not fulfil the conditions of the contest."
The first tender, closed in May 2001, also awarded the SPaP stake to Dunajservis and Penta, but was cancelled by the FNM presidium after some cabinet members complained of the low sale price, the vague sale terms and the general non-transparency of the tender. Former Finance Minister Brigita Schmögnerová in particular complained that the tender had not included the obligation to preserve public port functions (SPaP has a large share in passenger and freight traffic on the Danube river with over 200 vessels).
While Dunajservis won the first tender with a bid of Sk311 million, other tender participants had offered far more. Lesajová confirmed at the time that the Slovak firm Emteco had offered Sk1.1 billion, to be paid over 11 years.
The selection of Dunajservis surprised many, as the company was then less than a year old and was unheard of in shipping circles.
Penta, Dunajservis' financial partner in both bids, has its own set of critics. Since the group began large-scale activity in 1997 it has been a thorn in the side of some businesses, politicians and the wider public through its tactic of buying undervalued assets and selling to the highest bidder.
As Haščák told The Slovak Spectator last year: "One of the main parts of Penta's business is financial arbitrage. Thousands of companies do it in the West, and we try to practice it in Slovakia. This means we look for imbalances in the market, and then use them to make money."
"Penta was founded in order to make money. We do everything that the law does not forbid us. And as far as ethics or morals go, these are questions that require more time and space to answer. But it's very relative, deciding what is moral or ethical. It's possible that we have different ideas in this area than do media representatives or members of wider society," he added.
Penta officials intend to restructure the company. Following last year's tender, Penta member Xaver Gubáš confirmed the group's plans. "Our goal will be to separate anything from SPaP that is not its core business into separate units, and then to sell them off or find a strong strategic investor."
15. Apr 2002 at 0:00 | Dewey Smolka