Croatia to cash in on its shares in some of its biggest companies?
Shares owned by the state in Končar, Podravka and Croatian Telecom (HT), as well as a number of minority stakes which the state has in a number of tourist companies, are the first candidates for a new round of privatization which will be implemented by Tihomir Orešković’s government. That is the opinion of certain sources from the ruling coalition, which is shared by several independent economists, reports Jutarnji List on January 27 2016.
According to the Office for State Property Management, the state owns 644,908 shares or 25.07 percent of Končar. At the Zagreb Stock Exchange, Končar shares yesterday traded at a price of 628 kuna. This means that the sale of the state-owned shares could bring in more than 400 million kuna. However, since it is a controlling share of the company, experts say that the price would probably be higher.
Podravka is another company in which the state has a substantial share. According to data, the state owns a total of 1,402,411 shares, accounting for 19.7 percent of the company. During yesterday’s trading, Podravka shares were worth 316.06 kuna, which means that the sale of the state share could bring in more than 440 million kuna.
Although the former government started selling state’s shares of Croatian Telecom, the state still owns 1,459,068 shares or 1.78 percent of the total capital. HT shares yesterday were traded at a price of 139.80 kuna per share, so the sale of the shares at this time would bring in another 200 million kuna.
“The state has in its portfolio a lot of companies which it does not need and which can be sold. Special emphasis should be put on companies in which the state has just a small ownership share, which can be sold relatively quickly and easily”, said a source from the Patriotic Coalition, specifically pointing to Končar and Podravka.
“It is difficult to talk about what will be privatized until the adoption of the new budget and privatization plan. But, the fact is that the state has assets which can be sold. It should be kept in mind that the sale of property is one of the ways of financing the deficit, but it cannot replace reforms”, warns Željko Lovrinčević from the Economics Institute.
However, the sale of minority state ownership shares will not be enough to achieve the announced goal of half a billion euros from privatization. Therefore, some analysts say that the state should perhaps consider the privatization of companies in the energy sector. That includes the possibility of an IPO for HEP electricity utility company and INA oil company. “Why does the state need a minority stake in INA? Right now, the state can do almost nothing in INA without the green light from MOL. It would therefore be wise to make a partnership agreement with MOL and sell those shares, and in that way solve a large part of the public debt. With the sale of these shares to MOL, we could get about three billion euros”, says Damir Novotny, an economic analyst.
