* Slovenia to sell 15 state firms to cut bailout risk
* Coalition tensions over privatisation drive
By Marja Novak
LJUBLJANA, May 20 Slovenia will launch a
privatisation programme in September, Finance Minister Uros
Cufer said on Monday, signalling further fundraising efforts to
avert an international bailout.
Slovenia earlier this month listed 15 companies it planned
to sell to boost state income and improve corporate governance
in an ailing economy that is around 50-percent controlled by the
The firms include Slovenia's second-largest bank, Nova KBM
, its largest telecoms operator, Telekom
, Ljubljana airport and national airline Adria Airways.
The privatisation process is opposed by the governing
coalition's second-largest party, but Cufer told parliament it
would begin in September. He did not specify which firms would
be sold first.
"The processes will take two to three quarters to complete,"
Analyst Andraz Grahek, of consultancy Capital Genetics, said
the programme could raise up to 750 million euros.
Shielded by years of rapid growth driven by exports,
successive governments in Slovenia shied away from the unpopular
sale of state assets, often turning a blind eye to poor
corporate management and political interference in bank lending.
When demand for its exports fell away with the onset of the
global crisis, bad loans shot up.
Its banking sector, now saddled with 7 billion euros ($9
billion) in bad loans, is the focal point of fears the
ex-Yugoslav republic, which joined the euro zone in 2007, could
follow four other states in the bloc into seeking a sovereign
Rating agency Fitch cited that risk on Friday as it cut
Slovenia's long-term foreign currency rating to BBB-plus from
A-minus, warning more cuts could be on the way.
Analysts say the privatisations may prove too ambitious,
particularly given the tensions within the coalition that the
that the Social Democrats' opposition to the plan has generated.
"The risk factor is that privatisation processes fails...
particularly due to the stance of the Social Democrats," Grahek
added. "Trade unions could also oppose the privatisations."
Social Democrat deputy president Dejan Zidan, Slovenia's
agriculture minister, said his party would not allow tensions
over the plan to bring down the government.
"The privatisation list was not agreed within the coalition
so we do not support those privatisations ... but we will not
cause a political crisis over them," Zidan told Reuters.
Slovenia expects its budget deficit to almost double this
year to 7.9 percent of economic output, mainly due to capital
injections into state banks that are burdened by most of the
country's bad loans.
Slovenia bought some time in early May when it sold two
bonds worth a combined $3.5 billion. But it will have to tap the
markets again no later than the first quarter of next year
before a 5-year 1.5 billion euro bond matures in April.