Aluminum Smelter ZSNP to Decrease Its Share Capital by SKK 4.5 Bln.

According to the information released by aluminum smelter ZSNP Ziar nad Hronom, the company plans to decrease its share capital by more than SKK 4.5 billion. As of December 31, 2002 the company registered share capital nearly SKK 5.8 billion. The planned reduction of the share capital will be discussed by the annual general meeting of the company’s shareholders scheduled for July 9, 2003. The current losses and losses from previous years are behind the decrease of the share capital, which is intended to cover these losses. The decrease of the share capital will be made through the lowering of the face value of all bearer shares from SKK 1,000 to SKK 220.

Dairy Tamilk Trnava Boosts Profit to almost SKK 11 Mln. in 2002

Trnava-based dairy Tamilk, a.s. improved its performance last year and increased its profit by over SKK 10 million to SKK 10.83 million. Shareholders at their annual general meeting decided that the company will transfer 10 percent of the profit, i.e. SKK 1.08 million to the reserve fund and keep SKK 9.74 million within retained earnings from the previous years, according to data released by the company. Output grew over SKK 50 million from 2001 to SKK 473.9 million last year.

Irish Investor Enters Alternative Telecom Operator GlobalTel

An alternative telecommunication operator, Bratislava-based GlobalTel, s.r.o., announced an entry of a new investor this week. It is the Irish financial company IP Financing, which acquired a 45-percent stake in the firm. The two sides signed the investment contract last Tuesday. According to information released by GlobalTel Slovakia, British company Behrings Ltd., resided in London, still remains its majority holder. GlobalTel Slovakia, s.r.o. operates on the Slovak market as an telecommunication operator with a primary focus on the institutional clientele.

Car Sales in Slovakia Down 12.5 Percent in Five Months of 2003

Over the first five months of this year, 24,230 new passengers cars and small commercial vehicles were sold in Slovakia, which is 12.5 percent fewer than in the same period of 2002. Sales of passenger cars amounted to 21,054 units. In May alone, 5,813 passenger cars and small commercial vehicles were sold, Maria Novakova of the Automotive Industry Association (ZAP) informed SITA on Wednesday.

Cabinet Agrees to Sell its Remaining Stake in Slovenska Sporitelna

At its regular session on Wednesday, the Slovak cabinet approved a proposal to sell its remaining 10-percent stake in Slovakia’s largest bank, Slovenska Sporitelna (SLSP) from the portfolio of the Finance Ministry. Proceeds from this transaction should be used to cover government obligations linked to SLSP lawsuits. The government pledged to settle these obligations within the privatization contract with the current SLSP majority owner, Erste Bank. These legal disputes are linked with the purchase of Priemyselna Banka by SLSP in 1999. SLSP spokeswoman Eva Guttlerova said that some lawsuits have already finished in favor of SLSP while others are still open.

Cabinet Approves Supplement to CEFTA

At its Wednesday’s meeting, the cabinet approved a supplement to the Central European Free Trade Agreement (CEFTA), according to which member countries will be able to quit CEFTA as of the date of their accession to the European Union. The amended agreement should be put into effect at the latest by April 1, 2004 and it should be signed at the meeting of the CEFTA Joint Council to be held on July, 2003 in Slovenia. The agreement is now waiting for approval in parliament and the president’s signature.

FinMin Assesses Risk of Government Guarantees at SKK 56.9 Bln.

The Finance Ministry assessed government guarantees of SKK 56.933 billion as potential government debt. This represents 57.7 percent of current government guarantees, stems from the Finance Ministry’s report on drawing and risks of government-guaranteed loans, approved by the cabinet at its regular session on Wednesday. The ministry finds most risky guarantees totaling SKK 114.601 billion provided on bank loans to national railway company ZSSK, railway operator ZSR and power utility Slovenske Elektrarne, for which the government would have to pay SKK 55.132 billion. The ministry quantifies the risk of implementing government guarantees for the railway companies at 100 percent of principal of loans, while this is 30 percent of the principal of government-guaranteed loans of Slovenske Elektrarne.

Last Year’s Volume of Public Procurement was SKK 68.3 Bln.

Last year’s volume of public procurements was SKK 68.3 billion and according to the Public Procurement Office (UVO), the application of the law on public procurement reduced projected expenditures by SKK 3.39 billion. Ten largest procurers, among them power producer Slovenske Elektrarne, Slovak Road Administration, the Defense Ministry, gas utility Slovensky Plynarensky Priemysel and both national railway companies have signed procurement contracts worth SKK 38.5 billion, Rozalia Molnarova, head of UVO told SITA. The most frequently used procurement method was negotiated procedure without a contract notice through which 6,513 contracts were signed and goods and services were procured worth more than SKK 22 billion.

SMK Surprised at Labor Ministry’s Approach to Social Insurance Reform

Klara Sarkozy, deputy for the Party of Hungarian Coalition (SMK) expressed her surprise over the way in which the Labor Ministry communicates on the law on social insurance. According to her information, the Labor Ministry has made serious last minute intervention into the draft bill on social insurance without informing experts of the SMK in advance. Ms. Sarkozy thinks that in this case the ministers of the SMK should ask the cabinet to withdraw the submitted draft from the agenda of its Wednesday’s meeting. The SMK would also appreciate, if the cabinet discussed parallel to the above draft also the draft bill regulating the capitalization pillar of the pension insurance system, she said.

World Bank Supports Public Finance Management Reform in Slovakia

The World Bank approved a EUR 5 million Public Finance Management Project for Slovakia on Tuesday. The project will support the government’s public finance reform strategy by strengthening the country’s institutional capacity to use public resources more effectively, efficiently and in line with government priorities. The World Bank loan has a maturity of five years with a grace period of one year. The Public Finance Management Reform Project will be implemented over the next three years and will be completed in 2006.

RWE Gas Finally Raised its Share in Nafta Gbely to 40.14 Percent

Dutch-based RWE Gas International B.V. has received offers to sell 3,368 shares of natural gas storage company Nafta Gbely with a par value of SKK 1,000 within a mandatory takeover bid, which expired on June 7. RWE thus raised its share in the company from the original 40.03 to 40.14 percent, according to data released by the company. RWE Gas International announced the mandatory bid to buy outstanding shares of Nafta Gbely at SKK 880 per share on May 9. The Dutch company was obliged to announce the public takeover bid after its parent company, German-based RWE Gas AG, transferred to it its 40-percent stake in Nafta Gbely at the end of 2002.

EXIM Bank’s Annual Report for 2002 Presented at Cabinet Meeting

The Slovak EXIM Bank closed last year with net earnings of SKK 138.2 million, which is 9.5 percent above the plan. The bank’s performance was largely influenced by the contract for Shen Tou power station in China, which is the biggest reinsurance project in the history of the EXIM Bank. Revenues from this case made up 48 percent of total written premiums in 2002 and 64 percent of written premiums for insurance against medium and long-term risks. The information stems from the report on the EXIM Bank’s performance in 2002, okayed by the cabinet at its regular session on Wednesday.

U.S. Businessmen Examine Investment Opportunities in Eastern Slovakia

About seventy representatives of U.S. companies interested in investing in Slovakia have attended a presentation of investment opportunities in eastern Slovakia held in Kosice. Head of the regional government of Kosice Rudolf Bauer presented chances for investments in the Kosice region. Juraj Augustin, head of the Economic Development Center at the steelmaker U.S. Steel Kosice, told SITA that in the group were representatives of three US companies highly interested making a strategic investment. However, because the companies have not made their final decisions, Mr. Augustin refused to elaborate. Kosice is the second largest city of Slovakia with a population of 242,000.

Countries of the Visegrad Group to Cooperate in Promotion of Tourism

On Wednesday, countries of the Visegrad Group (V-4 Czech Republic, Hungary, Poland, and Slovakia) represented by Economy Ministry State Secretary Laszlo Pomothy, State Secretary of the Polish Ministry of Economy, Labor and Social Affairs Malgorzata Okonska-Zaremba, Deputy Minister for Economic Policy and Financial Management of the Czech Ministry of Local Development Jaroslav Gacka and Bela Pal from the Hungarian Prime Minister’s Secretariat for Tourism signed in Bratislava a protocol on mutual cooperation in the field of tourism. Cooperation of the V4 countries will include a joint presentation at the international tourism fair on September 16-18, 2003 in Chicago.

Money Market Reports Trading was Quiet on Wednesday

Atmosphere on the Slovak money market was quiet on Wednesday with trading mostly in tom/nexts and spot/nexts . The market saw the settlement of sterilization repo contracts with of the National Bank of Slovakia (NBS). Commercial banks deposited SKK 20.305 billion in their reserve accounts in the central bank, meeting the minimum reserve requirement on a cumulative basis at 104.68 percent on Wednesday. Overnights were traded at 6.0/6.4 percent p.a., tom/nexts at 5.9/6.2 percent p.a. and spot/nexts and one-week deposits at 6.3/6.5 percent p.a. The final price of two-week funds was 6.2/6.5 percent p.a., one-month money closed at 6.2/6.4 percent p.a. and two-month deposits were quoted at 6.1/6.25 percent p.a. Three-month funds kept at 6.0/6.1 percent p.a., six-month money at 5.6/5.8 percent and nine and twelve-month deposits fluctuated around 5.3/5.5 percent p.a.

Turnout of Panasonic Slovakia Grew 19 Percent in 2002

Turnover of Panasonic Slovakia, s.r.o. Bratislava in 2002 reached SKK 1.19 billion last year, up 19 percent y/y. Growth of total turnover copied the development of turnover of consumer electronics that went up also 19 percent to SKK 878 million. Net profit increased 6.5-fold to SKK 37.33 million, informed company’s representatives on Wednesday. Japanese company Matsushita Electric Industrial Co is the producer of Panasonic products. The company has three production plants in Slovakia — in Bratislava, Trstena and Stara Lubovna.

Slovak Farmers are Preparing Mass Protests

If the government does not start addressing the most urgent problems of the agricultural sector, farmers will launch protest actions. Representatives of the Slovak Chamber of Agriculture and Food Industry (SPPK) and other agricultural associations said this at a press conference on Wednesday. Farmers are in particular demanding additional money for the Agricultural Intervention Agency (IPA) of up to SKK 1.5 billion and coverage of losses caused by this year’s drought. SPPK chairman Ivan Oravec estimates that drought might cause damage similar to those in 2000, when the government allocated SKK 1 billion for the agricultural sector.

FOREX MARKET is Waiting for Q1 2003 GDP Figures

Trading on the Slovak foreign exchange market was lackluster on Wednesday. The exchange rate of the Slovak crown towards the euro moved between 41.500 and 41.530 SKK/EUR over the whole day. Against the US dollar, the crown moderately firmed from initial 35.45 SKK/USD (middle) to 35.25 SKK/USD when the US dollar oscillated around 1.1775 USD/EUR. The cross rate of the Czech and Slovak crowns was 1.325 SKK/CZK (middle).

SAX Index up 2.64 Percent to 151.5 Points Midweek

Rising final share price of crude oil refiner Slovnaft and gas storage company Nafta Gbely firmed the official share index SAX on Wednesday. It rose 2.64 percent or 3.9 points to 151.5 points. Turnover on the Bratislava Stock Exchange (BCPB) increased from SKK 1.815 billion on Tuesday to SKK 2.074 billion on Wednesday with SKK 120.83 million in share trading.

Cabinet Approves Changes in Providing of Sickness Benefits

At its session on Wednesday, the Slovak cabinet adopted a draft bill on compensation for income during sick leave, which transfers the duty to pay sickness benefits to an employee during the first ten days of sick leave from the social security provider to the employer. The paid benefits should account for 18 percent of the daily gross wage of the employee during the first three days of sick leave. Paid benefits will increase to 55 percent of the daily gross wage as of the fourth day of sick leave. The social security provider Socialna Poistovna, which pays all sickness benefits for the time being, should do this only from the eleventh day onward of the sick leave.

Revision to Large-scale Privatization Law Planned for September

The Slovak cabinet is expected to submit a draft revision to the large-scale privatization law, enabling the government to sell its remaining stakes in strategic companies, to parliament already in September. “I assume that deputies would approve it,” said Economy Minister Robert Nemcsics. Ruling coalition partners agreed on opening of the large-scale privatization law on Tuesday. After the session of the Coalition Council on Tuesday, Prime Minister Mikulas Dzurinda said that in case of sale of the remaining stake in lucrative gas utility Slovensky Plynarensky Priemysel (SPP) the government would not hurry.

The valid large-scale privatization law limits privatization up to 49-percent stakes in strategic companies and thus prevents the government from selling the remaining stakes.

Matador Will Reinvest SKK 172.3 Mln. from Last Year’s Profit

Shareholders of tire maker Matador a.s. Puchov approved on Wednesday the distribution company’s 2002 profit totaling SKK 181.363 million. The shareholder meeting decided to earmark SKK 9.068 million to the reserve fund. Further SKK 172.3 million will remain as retained earnings that the company will use for further development of the company, Pavol Hanzel of the company’s public relations and advertising department told SITA. The shareholders also approved a bond issue, the business plan for this year, a report about the main tasks for next year, and confirmed the strategic plan of Matador until 2006.