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UPDATE 1-Slovenian disposal seen reviving privatisation prospects
June 14, 2013 / 4:36 PM / 4 years ago

UPDATE 1-Slovenian disposal seen reviving privatisation prospects

* Slovenia’s Lasko to sell 23 pct stake in Mercator

* Clears path for sale to Croatia’s Agrokor

* Sign Slovenia serious about offloading assets (Recasts, adds details, background, quote)

By Marja Novak

LJUBLJANA, June 14 (Reuters) - Slovenia’s privatisation prospects received a boost on Friday from the sale of a stake in a local retailer owned by companies and banks in which the state has holdings.

The sale of state assets is important because it is a core part of the government’s bid to stabilise Slovenia’s finances and avoid becoming the latest member of Europe’s currency union to need an international bailout.

Despite the sale not involving a directly state-owned asset, the move was seen by some analysts as a signal of the euro zone member’s commitment to privatisation and to loosening the state’s grip on roughly 50 percent of the economy.

Pivovarna Lasko, a local drinks maker, said it would sell its 23 percent stake in the country’s largest food retailer Mercator to Croatian food producer and retailer Agrokor.

The decision paves the way for the sale of the whole of Mercator, with Lasko being part of a consortium of 12 local firms and banks which want to offload their combined 53 percent stake in the struggling retailer.

The Slovenian government does not directly control Mercator but has stakes in the companies and banks that do. A previous plan to sell Mercator had collapsed in 2012, seen at the time as an example of Slovenia’s reluctance to sell state assets

The latest sale agreement could therefore be a signal that further privatisations will follow. The government plans to sell another 15 firms, among them telecoms operator Telekom , to reduce the burden on the state budget and improve corporate governance.

“It seems that the sale of Mercator will go through this time,” said Marko Rozman, head of investment in the treasury department of Dezelna Banka. “This is a signal that Slovenia is in a situation when privatisation can no longer be avoided.”

Agrokor will pay 120 euros per Mercator share, local media reports said, valuing the whole company at 450 million euros ($598 million).

Officials at Agrokor and Mercator declined to comment on the reported figure, which is little more than half the value of the previous bid by Agrokor in early 2012.

That sale collapsed when previous Mercator management refused to give Agrokor access to perform due diligence on the firm.

Shares in Mercator jumped by 11.8 percent to 105 euros on expectations that the company would be sold.

Slovenia is the only former ex-communist state that so far refused to sell its major banks and a number of large companies.

The country is struggling to avoid seeking a bailout from the European Union and International Monetary Fund, with its banking sector, mostly state-owned, nursing some 7 billion euros of bad loans.

Mercator, which operates stores in Slovenia, Croatia, Bosnia, Montenegro, Serbia and Bulgaria, posted a loss of 8.6 million euros in the first quarter of this year. ($1 = 0.7519 euros) (Editing by Matt Robinson and David Holmes)

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