* Finnish govt due to sell shares to boost budget
* Leftist parties in government oppose privatisation
* Trimming Sampo, TeliaSonera stakes seen as most feasible
By Jussi Rosendahl
HELSINKI, Aug 20 Pressure from labour unions is
likely to limit sell-offs of state holdings when the government
announces its 2014 budget proposals next week.
The six-party coalition is due to raise 500 million euros
($668 million) a year from share sales to boost revenues and
maintain Finland's triple-A rating in the face of falling taxes
and rising spending on an ageing population.
But the SDP and Leftist Alliance, the second and third
biggest groups in government after the conservative National
Coalition party, are backed by unions which want the state to
keep its historical role in business and discourage job cuts.
"In general, we are very critical towards selling state
ownings," Annika Lapintie, a senior lawmaker for the Leftist
Alliance, told Reuters.
"The state must take care of Finnish employment, and
ownership is one way of doing that."
Despite moves toward privatisation since the 1990s, the
government still owns stakes in 14 of Helsinki's top listed
firms and in 45 others.
Most of the value of Solidium, the 7.9 billion euros state
fund that invests in listed companies, comes from stakes in
investment group Sampo and telecoms operator
The easiest option for the government would be to trim its
14 percent stake in Sampo and its 12 percent holding in
TeliaSonera, each worth nearly 3 billion euros.
Analysts said neither company was politically sensitive and
equity analysts said a rise in Sampo's share price to all-time
highs could make it easier to cash out.
"From the pricing perspective, the state's possible sales of
these two stocks would be exceptionally successful," said
analyst Sauli Vilén from Inderes Equity Research.
But international investors expecting bolder steps, such as
listing state-owned liquor maker Altia or reducing the 55.8
percent stake in airline Finnair, will be
"What I have understood from discussions with the SDP is
that it (Altia) is supposed to stay off the table," Antti Rinne,
the chairman of one of Finland's biggest white collar unions,
Left-leaning lawmakers face strong pressure from unions in
companies such as paper manufacturers and metal engineers which
are trying to cut jobs due to weak exports.
Finland's overall unionisation rate is around 75 percent,
among the highest in the world, and state-owned companies are
characterised by strong labour groupings.
Heidi Hautala, the minister responsible of state ownership
and a member of the Green party, has floated the idea of cutting
the state's 55.8-percent stake in Finnair.
But he idea has been rejected by many lawmakers who say such
a move could encourage more cuts at the airline, which is in the
midst of restructuring and seeking to slash expenditure.
The SDP, whose support has fallen to historic lows of 16
percent, is particularly wary ahead of elections scheduled for
State-owned road and rail construction firm Destia is seen
as slightly easier to offload because the government inherited a
mandate to sell it from the previous administration.
But analysts said it might be hard to find a buyer and
Destia would only raise 150-170 million euros.
Vilén said the government might be banking on a windfall
from utility Fortum, of which it owns 51 percent,
following a planned 5 billion-euro sale of its distribution
($1 = 0.7490 euros)
(Editing by David Cowell)