Slovenia needs privatisation to cut debt, incoming finance minister says (updated)

Telekom Slovenije, D.d

15/09/2014 17:12

* Telekom to be sold as a whole 
    * Public debt to rise to at least 81 pct of GDP in 2014 
    * New cabinet to be voted in on Thursday 
 
 (Adds details on privatisation) 
    By Marja Novak 
    LJUBLJANA, Sept 15 (Reuters) - Slovenia must privatise 15 
firms earmarked for sale last year, including telecoms operator 
Telekom Slovenia  TLSG.LJ , and use the funds to rein in rising 
public debt, incoming finance minister Dusan Mramor said on 
Monday. 
    The incoming minister's comment at a parliamentary committee 
hearing was likely to please foreign investors, keen for 
Slovenia to steady its finances after narrowly avoiding an 
international bailout for its banks last year. 
    He said Telekom Slovenia  TLSG.LJ , the largest of the  
companies on sale, must be sold as a whole, as promised to 
investors, rather than be split into two units. 
    Some members of the new Prime Minister Miro Cerar's 
centre-left bloc have suggested splitting Telekom into 
infrastructure and service units and keeping infrastructure in 
state hands. 
    Analysts said that would strongly dampen investor interest 
in a company expected to be sold for about one billion euros. 
    Mramor said such a split would probably cut Telekom's price  
to about one-third of the initially expected sum, adding: "I 
believe there can be no retreat there (in the sale of Telekom)." 
    Earlier this month, state-owned investment firm SDH, which 
is managing the privatisation, halted the sale pending approval 
to continue the process from the new government.  
     
    PUBLIC DEBT RISING 
    Only three of the 15 firms the outgoing cabinet pledged to 
privatise have been sold so far. Since Slovenia broke away from 
communist Yugoslavia in 1991, successive governments have 
largely opposed the sale of state assets. 
    Mramor said privatisation proceeds would help reduce 
Slovenia's public debt, which is forecast to rise sharply this 
year to at least 81 percent of gross domestic product (GDP) from 
71.7 percent in 2013. 
    "It is my opinion that privatisation of those firms that 
have already been earmarked for sale has to continue, but it has 
to be well managed," he said. 
    He said privatisation beyond those 15 firms will take place 
once the incoming government adopts a privatisation strategy 
which will determine which state firms can be sold.  
    Mramor, who served as finance minister from 2002 to 2004, 
said Slovenia would have to work to cut the budget deficit, 
which soared last year after the government pumped 3.3 billion 
euros ($4.3 billion) into its troubled banking sector. 
    Slovenia has promised the European Commission that it will 
cut the budget deficit to 3 percent of GDP in 2015 from some 4.2 
percent seen this year. 
    Mramor, an economics professor, is due to be confirmed as 
finance minister on Thursday, when parliament is expected to 
vote in the cabinet of centre-left Prime Minister Miro Cerar.  
 
(1 US dollar = 0.7729 euro) 
 
 (Reporting by Marja Novak; Editing by Tom Heneghan) 
 ((Marja.Novak@thomsonreuters.com; Reuters Messaging: 
marja.novak.thomsonreuters.com@reuters.net)) 
 
Keywords: SLOVENIA DEBT/