Slovenia Business Week no. 01, January 2nd 2006
Table of contents:
HEADLINES ................................................................................................................. 2
Dun&Bradstreet Report Highlights Mounting Opposition to Reforms...................... 2
Annual Inflation Rate at 2.3% .................................................................................... 2
Government to Speed Up Sales of its Stakes in Companies ...................................... 2
EUROPEAN UNION .................................................................................................... 4
Slovenia Welcomes Austria's Plans for EU Presidency ............................................. 4
LEGISLATION ............................................................................................................. 5
Retailer Challenges Sunday Shopping Ban ................................................................ 5
Mini Tax Reform Enters into Force ........................................................................... 5
Trade Act Enters into Force........................................................................................ 6
STATISTICS/FORECASTS.......................................................................................... 8
Survey: Slovenians Only Moderately Optimistic about 2006 .................................... 8
SURS: Inflation Was Fuelled by Energy Prices in 2005 ............................................ 8
FINANCE ...................................................................................................................... 9
Italian Bank Withdraws from Takeover for Slovenian Brokerage ............................. 9
Merged Insurer Adriatic Slovenica Enters Court's Register ....................................... 9
Market Capitalisation of Securities Up due to Bonds ................................................ 9
Ljubljana Stock Exchange ........................................................................................ 10
Foreign Exchange ..................................................................................................... 11
BRANCH INFORMATION ........................................................................................ 12
2006 Motorway Construction Plan the Most Extensive so Far ................................ 12
Mobile Operators Introduce Number Portability...................................................... 12
COMPANIES .............................................................................................................. 14
Gorenje on the Lookout for New Acquisitions, Chairman Says .............................. 14
Telekom Ready to Remove Fuses on Local Loops .................................................. 14
BTC to End 2005 with EUR 8.76m in Net Profit ..................................................... 15
Gorenje Supervisors Appoint New CFO .................................................................. 15
Major Trimo Owners Backtrack on Takeover Plan.................................................. 15
Mobile Operator Vega Lagging Behind in Number Portability ............................... 16
Iskra Management Publishes MBO Bid ................................................................... 16
Ministry Releases New Bill on Chambers of Commerce ......................................... 17
CCIS Calls for Unified Changes to All Chambers ................................................... 18
Drava River Power Company Satisfied with 2005 ................................................... 18
Luka Koper with Busiest Year so Far ...................................................................... 18
SLOVENIA IN BRIEF ................................................................................................ 20
Government Dismisses Head of Money Laundering Watchdog .............................. 20
2006 Active Employment Programme to Include 180,000 People .......................... 20
Erjavec Receives Proposals on Slovenia's Airspace Policing .................................. 20
Insurance Watchdog Starts Procedure to Revoke Vzajemna CEO's License ........... 20
HEADLINES
Dun&Bradstreet Report Highlights Mounting Opposition to Reforms
Dun&Bradstreet's (D&B) report for January keeps Slovenia firmly at the top in the
region, with the country's rating still bearing a growth sign
Dun&Bradstreet's (D&B) report for January keeps Slovenia firmly at the top in the
region, with the country's rating still bearing a growth sign. Meanwhile, the report
points to growing discontent with the structural reforms being proposed by the
government.
According to the world's leading rating firm, the rising discontent with the proposed
reforms "came to a head....in the protests" staged by the country's four largest union
associations on 26 November. Around 40,000 people took part in what is thought to
be Slovenia's largest demonstration ever.
The report highlights that the government of Prime Minister Janez Jansa has been
losing public support in recent months because of its reform efforts. Moreover, the
coalition Pensioners' Party (DeSUS) has started to have second thoughts about the
proposed reforms, D&B says, adding that it doubts the party would try and bring
down the coalition any time soon.
Annual Inflation Rate at 2.3%
Meanwhile, the 12-month average price growth measured with the EMU convergence
price index also remained steady at 2.5% in December
The holiday mood has kept consumer prices unchanged in December from November,
yet they increased by 2.3% over December 2004, according to early figures released
by the Statistical Office on Friday, 30 December.
Numerous Christmas and New Year's season discounts were again the main reason
for the drop in consumer prices, most notably clothes and footwear prices. On
average, clothes prices fell 3.2% and footwear prices 2.4% in December.
Meanwhile, the 12-month average price growth measured with the EMU convergence
price index also remained steady at 2.5% in December.
According to the latest available data in November, the convergence price index stood
at 2.5%, which means that Slovenia met eurozone entry requirements as early as last
month.
With 2.3%, Slovenia's annual inflation rate has reached the European level. The
highest price growth was registered in housing (up 0.9 percentage points), and
transport, recreation and culture (all up 0.3 percentage points).
Prices of services rose faster than prices of goods. Compared to last year's December,
services were dearer by 3% and good by 2%.
Government to Speed Up Sales of its Stakes in Companies
The government intends to sell all of its below 50% stakes it holds in Slovenian
companies by the end of 2007, as well as heed the advice of expert groups in selling
the stakes in those companies where the government holds a majority stake
The government intends to sell all of its below 50% stakes it holds in Slovenian
companies by the end of 2007, as well as heed the advice of expert groups in selling
the stakes in those companies where the government holds a majority stake.
Finance Minister Andrej Bajuk has said that the companies where the state owns more
than a 50% stake are not on the government's list of state property earmarked for sale
in 2006, as their inclusion would pose more questions than provide answers.
However, based on privatisation plans of expert groups, the government will draft its
privatisation proposals for such companies and then ask the parliament to add them to
the list, he added.
Meanwhile, four of the six expert groups have already submitted their privatisation
proposals to the government, namely the group for the number one and two of
Slovenian banking, the Nova Ljubljanska banka and the Nova Kreditna banka
Maribor.
The government also already holds the documents on privatising the national telco
Telekom Slovenije and the energy sector.
However, the group deciding on the best way to privatise the country's largest insurer
Zavarovalnica Triglav has until 31 January to draft its proposal, while the group on
drafting the plan of sales of stakes owned by state-run KAD and SOD funds has until
31 March to finalise its proposal.
The sale programme will be drafted for every one of the state's investments, including
the Slovenian Steel Group, shoe maker Peko, power producer Dravske elektrarne and
aluminium producer Talum, among others.
According to economist France Krizanic, Slovenia is currently in a phase where a
state's share in an individual company is exactly like any other share.
He told STA that state ownership should not be used to create monopolies, while the
state can sell or buy its stakes according to profit maximisation or to the development
policy goals.
It sometimes makes sense that the state retains a stake in strategically important
companies, such as power producers, insurers or telecommunication companies, he
explained.
The yearly dividends from such companies also pay for some of the public expenses,
Krizanic added.
According to the recently adopted privatisation programme for the Slovenian Steel
Group, the state intends to reduce its stake in the group to 25% plus one share. The
state will likely keep such a stake in Telekom Slovenije as well.
EUROPEAN UNION
Slovenia Welcomes Austria's Plans for EU Presidency
The Slovenian Foreign Ministry welcomed Austria's intention to revive the European
economy, as Slovenia's northern neighbour began its six month stint as EU president
on 1 January
The Slovenian Foreign Ministry welcomed Austria's intention to revive the European
economy, as Slovenia's northern neighbour began its six month stint as EU president
on Sunday. 1 January.
Slovenia will strive for a compromise regarding the services directive and the
implementation of the 7th framework research programme, the ministry wrote in a
press release.
The country supports Austria's intention to facilitate the conditions that would enable
the European economy to grow faster and become more competitive by 2010.
Both countries also share the opinion that a revival of the discussion on the EU's
future is necessary to give a fresh impetus to the bloc, as well as stress the need to
facilitate the development of Western Balkan countries, the ministry said.
The ministry also wrote that Slovenia is satisfied with the achievements of the British
presidency which succeeded in launching EU accession talks with Turkey and Croatia
as well as adopted the EU financial plan for the 2007-2013 period.
LEGISLATION
Retailer Challenges Sunday Shopping Ban
Wholesaler and retailer Emona Obala Koper, which operates the Noc in dan 24-hour
convenience stores in the country, believes the law passed by parliament last year is
discriminatory
A Slovenian chain of convenience stores has decided to enter a constitutional
challenge against the law that bans shops from keeping Sunday opening hours.
Wholesaler and retailer Emona Obala Koper, which operates the Noc in dan 24-hour
convenience stores in the country, believes the law passed by parliament last year is
discriminatory.
Emona Obala Koper therefore asked the Constitutional Court to rule that the ban is
unconstitutional and issue a stay in the implementation of the law, the company said
in a press release.
The changes to the retail act fail to take into consideration the specific nature of
convenience stores, while it also discriminates between shops, the company claims.
The changes to the trade act stipulate that, with some exceptions, shops will be closed
on Sundays as of 2006.
The exceptions to the ban include shops smaller than 200 sq. metres located at petrol
stations, town centres, marinas, camping sites, spas, hospitals, hotels, airports, border
crossings, train and bus stations. Moreover, shops selling food will be allowed to open
up to 10 Sundays a year.
Meanwhile, the National Assembly is expected to take a renewed vote on the law in
early January after the National Council, the upper house of parliament, vetoed it. As
a result, changes to the trade act adopted by parliament back in February 2004 would
come into force as of 1 January 2006 until the new changes are not reconfirmed.
According to Marjetka Rausl Lesjak, the spokesperson for Parliament Speaker France
Cukjati, parliament is expected to put the item on the agenda of an extraordinary
session that is expected to be held in early January.
The National Council vetoed the bill at the behest of the councillors representing the
employees interest group. Parliament now needs to muster an absolute majority to
enact the law.
In line with the old changes that will now enter into force, all shops located at petrol
stations, hospitals, hotels, airports, border crossings, train and bus stations will be
allowed to be open on Sundays regardless of their size.
The old changes initially limited the size of shops included in the exceptions to 80 sq.
metres, but the Constitutional Court annulled that threshold. The ruling also prompted
the government to go about drafting new legislation.
Mini Tax Reform Enters into Force
The changes were made to the corporate income tax act; the payroll tax act; the value
added tax act; the income tax act; and the tax procedure act
Changes to five tax acts designed to simplify the Slovenian tax code and passed by
parliament in November entered into force on Sunday, 1 January.
The changes were made to the corporate income tax act; the payroll tax act; the value
added tax act; the income tax act; and the tax procedure act.
This mini tax reform will be followed by the more radical reform, announced by the
government for 2007, after Slovenia implements the euro changeover.
After a comprehensive change to the income tax act entered into force on 1 January
2005, the current amendments bring several tax benefits and relieves, some of which
could already be used in filing the 2005 income tax form.
The amendments divide earnings into active and passive income, for which different
rules apply. Active income, such as salaries and royalties, will be taxed the same as
until now, subject to a progressive tax with five brackets on annual basis.
Passive income, including capital gains and earnings from interest, will meanwhile be
subject to a pay-as-you-go tax of 20% regardless of the individual's total annual
earnings.
The tax rate for capital gains will be progressively lower relative to the period of
ownership, expiring after 20 years.
Moreover, several types of bonuses (company mobile phones and free parking) will
be exempt from income tax, as will special state-provided payments for large families
and war veterans.
Meanwhile, income generated from mutual funds will no longer be taxed, whereas
other types of similar income will be treated either as interest or dividends. Taxation
on real estate transactions remains unchanged.
Amendments to the corporate income tax envisage a 20% tax relief to encourage
research and development. A 40% relief could be legislated for less developed areas,
pending European Commission approval.
For 2006 and 2007 tax breaks for investments into equipment, which would have to
be reduced to 10% according to the old legislation, will be raised to 20%.
Amendments to the payroll tax act meanwhile stipulate that the tax will be gradually
abolished by 2009. This will take a great deal of tax wedge off the wages higher than
SIT 165,000 (around EUR 700), that is for higher income earners.
The abolishment of the payroll tax is aimed at increasing employment among
university graduates by lessening the costs the employers pay for large-income
earners.
Also in 2006, the amendments to the VAT act will allow companies with up to SIT
50m (EUR 0.20m) of annual revenues to pay VAT only after their invoice has been
paid, instead of, as was the case, when they issue the invoice.
The amendments will therefore lift the burden of around 70% of all companies liable
to pay VAT. However, the change will apply only to domestic transactions.
Moreover, the parliament passed the changes to the tax procedure act that are aimed at
improving the efficiency of the Tax Administration and creating a more friendly tax
procedure for the taxpayers.
Trade Act Enters into Force
Under the currently valid act, opening hours for retailers will be limited to ten
Sundays a year for shops selling essential goods
The Trade Act, passed by the parliament in February 2004 and amended in midDecember 2005, entered into force on Sunday, 1 January, imposing a ban on Sunday
shopping.
The legislation has been issued a temporary stay by the Constitutional Court. The stay
expired on Saturday, 31 December.
However, as the National Council vetoed the changes passed in December, the more
restrictive version of the act entered into force. The parliament is expected to stage an
extraordinary session to take a renewed vote on the changes on 10 January.
Under the currently valid act, opening hours for retailers will be limited to ten
Sundays a year for shops selling essential goods.
The current list of exceptions include shops located at petrol stations, city or town
centres, marinas, camping sites, spas, hospitals, hotels, airports, border crossings, train
and bus stations.
As the vetoed amendments raise the surface area of shops that are allowed to stay
open to 200 sq. metres - the 2003 referendum on the issue limited the surface area to
80 sq. metres - the existing legal void will enable all shops on the list of exceptions to
remain open, regardless of their size.
If the parliament musters the necessary absolute majority (46 votes) to re-pass the act,
the list of exceptions will also include shops in natural, cultural, historical and
pilgrimage centres, as well as ski resorts and graveyards.
STATISTICS/FORECASTS
Survey: Slovenians Only Moderately Optimistic about 2006
More than a third of Slovenians (36%) expect the year 2006 to be generally the same
as this year, with nearly 35% expecting a better year
More than a third of Slovenians (36%) expect the year 2006 to be generally the same
as this year, with nearly 35% expecting a better year, according to a survey published
on Saturday, 31 December by the daily Delo.
On the other hand, nearly 25% of those polled by Delo's Stik agency are pessimistic
about 2006, whereas 4.4% are undecided about their prospects next year.
The results are slightly worse than last year's, when a better year was expected by
38% and nearly 40% expected 2005 to be similar to 2004. The number of pessimists,
meanwhile, was somehow lower than this year (18.6%).
Less optimism, however, was noticed about the economic situation: while 20% of
respondents expect the year 2006 to bring an improvement, and the same amount
anticipate a status quo, a poorer economic situation is expected by as many as 44.5%.
Values were another topic the 772 respondents were asked about, with as many as
89.6% giving good health as the most cherished value, followed by family happiness
(76.7%), and peace and security (58.4%).
Over 77% of those polled will be at home with their families on the New Year's Eve.
More than 7% will be celebrating the New Year at their relatives' or friends', and
3.3% intend to join outdoor celebrations.
SURS: Inflation Was Fuelled by Energy Prices in 2005
Compared to last year, gas prices increased by 19.9%, electricity by 17.5%, and
liquid fuel by 15.8%
Energy prices saw the biggest rise in 2005, while prices of air transport witnessed the
biggest drop, Ema Misic of the Statistical Office told the press on Friday, 30
December as she commented on Slovenia's 2.3% annual inflation rate.
Compared to last year, gas prices increased by 19.9%, electricity by 17.5%, and liquid
fuel by 15.8%, the head of the office's department for consumer prices explained.
Air transport prices fell by 14.5% due to a crisis in this field and to the arrival of
budget airline Easyjet in Slovenia, Misic continued.
With the biggest increase in fuel prices, this year's consumer price trends were similar
to those in 2003 and 2004. The opposite trend was observed in food prices, which
went up this year, Misic explained.
In comparison to the two previous years, services and government-controlled prices,
such as utility services, transport, mail and telephone services, did not go up as much
as in 2003 and 2004.
Meanwhile, clothes and footwear prices saw a big drop in 2005, which Misic
attributed especially to a rise in imports from China. She explained that this trend was
not only typical of Slovenia, but also other European countries.
Furthermore, SURS director Irena Krizman pointed to Slovenia meeting the
Maastricht inflation criterion (2.5%) in November, which Greece, Luxembourg and
Spain did not succeed in.
FINANCE
Italian Bank Withdraws from Takeover for Slovenian Brokerage
Italian bank Banca Popolare FriulAdria, a subsidiary of Milan-based group Banca
Intesa, announced its plan to withdraw from the takeover bid for the Slovenian stock
brokerage Medvesek Pusnik
Italian bank Banca Popolare FriulAdria, a subsidiary of Milan-based group Banca
Intesa, announced its plan on Thursday, 29 December to withdraw from the takeover
bid for the Slovenian stock brokerage Medvesek Pusnik.
Jure Klepec of Medvesek Pusnik said that their biggest owners and the Italian bank
had probably failed to reach agreement on the details of the deal, which however
should not pose a problem for the firm.
"We'll continue to do business on our own," said Klepec, pleased with this year's
results, especially in the field of funds management.
Banca Popolare FriulAdria formally made a takeover bid on 29 November, with the
acquisition price of SIT 18,063 (EUR 75.40) per share.
The bank filed the request to acquire a majority stake in the Slovenian company with
the Securities Market Agency at the end of July. It currently owns 10% of the
brokerage firm.
At the time Klepec told STA that Banca Popolare FriulAdria's bid was seen a friendly
takeover agreed upon in negotiations between the two sides.
Merged Insurer Adriatic Slovenica Enters Court's Register
By entering the court's register on 29 December insurer Adriatic Slovenica concluded
the merger process which started on 24 May, when the supervisory boards of both
Adriatic and Slovenica backed the annexation of Slovenica to Adriatic
By entering the court's register on Thursday, 29 December insurer Adriatic Slovenica
concluded the merger process which started on 24 May, when the supervisory boards
of both Adriatic and Slovenica backed the annexation of Slovenica to Adriatic.
The merger was then backed by the shareholders in June, while the Insurance
Supervision Agency cleared it earlier this month. The new company will be headed by
Dusan Novak, the former Adriatic CEO.
The three-member board of the second largest Slovenian insurance company will also
include the current chief exec of life insurer Slovenica Zivljenje, Matija Senk, and
Adriatic board member Milena Georgievska.
According to the new CEO, the merger was carried out with the intention to
strengthen the market position and reduce costs. Novak said at a news conference that
the move will cause no redundancies nor will it change anything for the company's
clients.
Adriatic Slovenica, with the initial capital of SIT 3.67bn (EUR 15.32m), will be
bigger than the current number 2, Zavarovalnica Maribor, but far smaller than the
biggest insurer in the country, Zavarovalnica Triglav.
Market Capitalisation of Securities Up due to Bonds
The market capitalisation of securities on the Ljubljana Stock Exchange topped SIT
3,210bn (EUR 13.4bn) at the end of 2005, a rise of 5.27% over the end of last year
The market capitalisation of securities on the Ljubljana Stock Exchange topped SIT
3,210bn (EUR 13.4bn) at the end of 2005, a rise of 5.27% over the end of last year.
The rise was propelled by bonds, whose market capitalisation increased by 31.35% to
SIT 1,171bn (EUR 4.88bn).
Thus, the BIO bond index increased by 1.07 points or 0.87% to 123.11 points from
the last trading day in 2004.
The opposite trend could be observed in shares, whose market capitalisation dropped
by 4.05% to SIT 1,183bn (4.9bn EUR).
This pushed the SBI 20 benchmark index down by 274.38 points or 5.6% to close at
4,630.10 points on 30 December.
Similarly, the PIX investment fund index dropped by 551.09 points or 12.2%, closing
at 3,962.29.
Stock brokers and analysts expect the year 2006 to be more profitable, chiefly as a
result of new companies entering the stock market.
According to Tomislav Apolonija of the bank Abanka Vipa, national telco Telekom,
the country's largest bank NLB and the leading insurer Zavarovalnica Triglav are
most likely to get listed next year.
Apolonija also expects the Slovenian drug maker Krka to get listed on the London
Stock Exchange. He also believes that the fuel trader Petrol could be supplied with
fresh capital or even sold.
Higher stock prices are also expected by broker Marko Garbajs of Ilirika, to be driven
by new listings, some takeovers and the transformation of investment firms into
investment funds.
Ljubljana Stock Exchange
Towards the end of the last week of trading on the Ljubljana Stock Exchange in 2005,
a rise in share prices pushed the SBI 20 benchmark index up 63.06 points (1.38%)
from the previous week to 4,630.10, while the index has lost 5.6% since the beginning
of this year
Towards the end of the last week of trading on the Ljubljana Stock Exchange in 2005,
a rise in share prices pushed the SBI 20 benchmark index up 63.06 points (1.38%)
from the previous week to 4,630.10, while the index has lost 5.6% since the beginning
of this year.
In four days of mostly uneventful trading – 26 December was a bank holiday in the
country - the brokers closed a total of 4,550 deals worth SIT 8.9bn (EUR 37.14m),
with as much as 65% of the amount coming from block deals.
Analysts have largely attributed Thursday and Friday's rising share prices to end-ofyear changes intended to benefit investors' balance. Also, several amended tax laws
are entering into force on 1 January, taxing the investors in line with Friday's share
prices.
The hottest share of the year was also the most heavily traded share of this week:
pharmaceutical company Krka gained 1.1% and closed the week at SIT 102,342
(EUR 427.18).
Investors were also very interested in fuel trader Petrol, which, however, dropped
0.33% to SIT 70,741 (EUR 295.28), while grocer Mercator shed 0.14% to SIT 36,859
(EUR 153.85).
Bonds trading was dominated by the Slovenian Restitution Fund and 58th issue of the
Republic of Slovenia bonds, which turned over SIT 189.2m/EUR 0.789m and SIT
98m/EUR 0.4m, respectively.
Upbeat trading was also the norm on the free market, where the PIX investment fund
index gained 64.67 points or 1.66% to 3,962.29 points.
Meanwhile, the BIO bond index ended the week 0.23 points or 0.19% higher at
123.11.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.58 (+0.00)
U.S. dollar (USD) - SIT 202.43 (+0.15)
Swiss franc (CHF) - SIT 154.04 (+0.11)
British pound (GBP) - SIT 348.68 -2.09
BRANCH INFORMATION
2006 Motorway Construction Plan the Most Extensive so Far
According to the plan, which is a part of the national programme for motorways
construction, 22.3 km of motorways will be opened in 2006, construction will
continue on 82.8 km, works will begin on a further 47.5 km, while pre-construction
activities will take place on 20.4 km of roads
The yearly plan of constructing and repairing Slovenia's motorways for 2006 is the
most extensive so far, with SIT 170.6bn (EUR 712m) allocated for various activities
on a total of 173 kilometres on motorways, dual carriageways and other roads.
According to the plan, which is a part of the national programme for motorways
construction, 22.3 km of motorways will be opened in 2006, construction will
continue on 82.8 km, works will begin on a further 47.5 km, while pre-construction
activities will take place on 20.4 km of roads.
The plan was adopted by the government in December, and is currently awaiting
approval by the parliament.
However, the Motorway Company (DARS) will only get SIT 5.9bn (EUR 24.62m) of
budgetary funds, a substantial decrease from this year's SIT 19bn (EUR 79.3m).
It plans to get the bulk of its funds from newly-issued bonds SIT 86.6bn (EUR
361.47m), while the company will also use 40.4bn (EUR 168.63m) of existing loans.
Road tolls will bring in an additional SIT 35bn (EUR 146m) in 2006.
The largest part of the funds (SIT 117.9bn/EUR 492m) will go for motorway
construction, while SIT 10.1bn (EUR 42.15m) will be used for maintenance and
repair activities.
With further cuts planned in the 2005-2007 period, doubts have arisen regarding the
solvency of the programme. Therefore the Economic Institute of the Ljubljana Faculty
of Law analysed the impact of potential budgetary cuts on the programme.
The analysis was based on the presumption that the national motorway construction
programme takes place between 2004 and 2033, with the programme being
completely self-sufficient by 2020.
A projected surplus after 2020 would then be used for repaying debts stemming from
the supplementary motorway construction programme under which linking roads in
the total value of around EUR 2bn would be built.
However, the continuing reduction of budgetary funds would mean that DARS would
have to take out additional loans, and could not repay them by 2033, but only after
2060.
Mobile Operators Introduce Number Portability
While operators Mobitel, Simobil, Debitel and Volja mobile said that they will
implement number portability on time, operator Vega will enable the service in mid
February
Slovenian mobile operators implemented the long-awaited number portability on
Sunday, 1 January, allowing users of their services to keep their numbers when
switching between operators.
According to the Slovenian legislation, the operators had to ensure number portability
by 31 December 2005, however, the novelty will become available to the consumers
on 3 January, the first working day in the country in 2006.
While operators Mobitel, Simobil, Debitel and Volja mobile said that they will
implement number portability on time, operator Vega will enable the service in mid
February.
"Because of troubles with the suppliers of the necessary equipment, the company will
introduce number portability only in the first half of February 2006," Vega's media
and public relations officer Tanja Zabukovnik said on 28 December.
The telecommunication's watchdog has already been informed about Vega's delay,
said Tomaz Simonic, the acting director of the Agency for Post and Electronic
Communications (APEK). According to Simic, APEK will decide on further
measures in this case after the New Year.
Vega fully supports number portability, even though the system has not brought major
changes to the competitiveness landscape in other countries, where it was
implemented. However, it remains one of the tools that facilitates the choice among
operators, the company said.
However, in the "chaotic conditions on the Slovenian electronic communications
market the implementation of number portability alone will not suffice to improve its
competitiveness," Vega added.
Mobitel agrees with Vega regarding the small impact number portability will have on
the market shares of individual operators. They do not expect many customers will
leave Mobitel for other operators, as number portability allows the "users only to keep
their phone number, but not the services they use", Slovenia's leading operator
stressed.
A similar view was echoed by Simobil. The company added that the main reasons
people started using their services lies in the lower monthly costs and pleasure of
users with Simobil's services.
However, users cannot transfer an inactive number, so Slovenia's second most popular
operator warned that they should keep their existing account until they subscribe to
their new operator of choice.
The electronic communications act obliges all operators of public telephone
communications to enable their users to retain their phone number when switching
between operators.
APEK also called on operators to allow free of charge portability in a six-month
period, adding that the expenses of technical adjustments needed for number
portability have to be covered by the operators themselves.
Number portability was also demanded by the European Commission which officially
reprimanded Slovenia in July for lagging behind in enabling the service.
In accordance with the act, Slovenian telecommunications providers chose a joint bid
by the Avtenta.si and Telemach companies as their central phone number database
manager in October.
Fixed line operators have to implement number portability by mid 2006.
COMPANIES
Gorenje on the Lookout for New Acquisitions, Chairman Says
In 2006 home appliances maker Gorenje intends to look for potential acquisition
targets in Eastern and Western Europe, the company's chairman Franjo Bobinac has
told STA in an interview
In 2006 home appliances maker Gorenje intends to look for potential acquisition
targets in Eastern and Western Europe, the company's chairman Franjo Bobinac has
told STA in an interview.
Bobinac said that Gorenje will soon open a logistics centre and a dealership in
Bulgaria, as well as an outlet in Belgrade, the capital of Serbia-Montenegro.
Moreover, by the autumn of 2006, Gorenje will also launch a new production facility
in Valjevo, Serbia-Montenegro. The factory, which will produce refrigerators and
freezers, will employ 200 people and is expected to manufacture 35% of all of
Gorenje's refrigerators by 2010, he added.
According to him, the SIT 4bn (EUR 16.69m) investment will bring in revenues of
between EUR 45m and 50m each year.
"We are very interested in the Ukrainian market, where we have managed to double
our sales in 2005, reaching EUR 20m in revenues...We also anticipate double-digit
growth in Russia, while we are also counting on Romania," Bobinac said.
The group also plans to open a branch office in Dubai to cover the Middle and Far
East markets. Meanwhile, the recently opened branch office in China will acquire
components for Gorenje products.
The strategic business plan for the 2006-2010 period envisages streamlining the
group's operations and bolstering logistics. By 2008 some 150 to 160 employees are
to retire, with Gorenje planning no replacements, Bobinac told STA.
He welcomed the proposed abolishment of the payroll tax (which is to be phased out
by 2009), as Gorenje spends SIT 900m (EUR 3.75m) annually on the tax,
representing a quarter of its profits.
"I welcome the [government-sponsored] measures to boost the economy's
productivity, including a flat tax," Bobinac told STA.
Meanwhile, he refused to comment on who will replace chief financial officer Ziga
Debeljak, who is to become the CEO of Slovenia's largest grocer Mercator on 1
January. It might even be two persons, he added.
The Gorenje group generated SIT 177.2bn (EUR 739.6m) in consolidated net sales
revenues in the first three quarters of 2005, a 14.8% rise on the same period last year.
Telekom Ready to Remove Fuses on Local Loops
The national telco is ready to remove fuses from its broadband local loops, as
demanded by the telecommunications watchdog, if it gets a suitable guarantee from
the lessee of compensation in case of damage to the local loops
The national telco is ready to remove fuses from its broadband local loops, as
demanded by the telecommunications watchdog, if it gets a suitable guarantee from
the lessee of compensation in case of damage to the local loops.
The Agency for Post and Electronic Communication (APEK) handed a decision to
Telekom Slovenia, demanding that the telco allows free and unrestricted unbundled
local loop access to T-2.
The telco responded on Tuesday, 27 December by saying that it would fulfil the order
if T-2 agrees to sign an agreement promising to cover the cost of any damage caused
to the local loops and telephone exchanges as a result of the removal of the fuses.
At the same time Telekom Slovenije called on T-2 to begin joint tests to determine
what danger direct lightning hits could cause to the company's equipment, including
telephone exchanges, if the fuses are removed.
T-2 has meanwhile told STA that they have received the telco's proposal, and
preliminary assessed it as unacceptable. The company added that it was drafting a
response.
Although not officially acquainted with Telekom's proposal, acting head of APEK
Tomaz Simonic labelled it a step in the right direction.
T-2, which began offering VDSL broadband Internet access in October, filed a
complaint with APEK against Telekom on 20 October accusing the company of
limiting access to T-2's leased unbundled local loops.
BTC to End 2005 with EUR 8.76m in Net Profit
The company projects revenues to rise to SIT 9.7bn (EUR 40.48m) in 2006
The BTC group, the manager of the biggest Ljubljana shopping and logistics hub,
expects to finish the year with revenues of SIT 8.9bn (EUR 37.14m) and a net profit
of SIT 2.1bn (EUR 8.76m), the company said on Tuesday, 27 December.
BTC allocated SIT 3bn (EUR 12.52m) for investment in 2005, with its largest single
investment being the Atlantic aquatic amusement centre.
The company also said that the number of employees grew by 7% in 2005, while 200
additional people found employment due to new investments in the hub.
The company projects revenues to rise to SIT 9.7bn (EUR 40.48m) in 2006, although
it says that the net profit is expected to drop to SIT 1.5bn (EUR 6.26m).
In 2006 BTC plans to spend between SIT 615m (EUR 2.56m) and SIT 3.8bn (EUR
15.86m) on investment.
Gorenje Supervisors Appoint New CFO
The supervisory board of home appliance group Gorenje has appointed Mirjana
Dimc Perko to replace Ziga Debeljak as chief financial officer
The supervisory board of home appliance group Gorenje has appointed Mirjana Dimc
Perko to replace Ziga Debeljak as chief financial officer.
The change in the management board of the company has been prompted by
Debeljak's appointment as chairman of Slovenia's leading retailer, Mercator, in early
December.
Dimc Perko (1967), who graduated in economics, was appointed at the behest of
Gorenje chairman Franjo Bobinac.
Her term is to last until July 2008, when the current term of the Gorenje management
board runs out.
She had previously worked in a private consultancy firm and at asset management
firm Triglav, where she was also the director of the Triglav steber 1 investment fund.
Major Trimo Owners Backtrack on Takeover Plan
The largest owners of the pre-fabricated construction panel maker Trimo Trebnje
have backed away from their intent to buy shares from minority owners
The largest owners of the pre-fabricated construction panel maker Trimo Trebnje
have backed away from their intent to buy shares from minority owners, the
companies involved said in a press release on Wednesday, 28 December.
The bidders (bank Probanka, investment firm Medaljon, investment firm Zlata moneta
II and Trimo Investments), which own some 42% of Trimo, said circumstances have
changed since their bid in November.
The bidders have established that due to time restraints, it was impossible to
harmonise their interests and take care of all the necessary paperwork at the Securities
Clearing Corporation (KDD).
The companies had previously said they wanted to become the sole owners of Trimo
through a public offer, thus consolidating company ownership.
Mobile Operator Vega Lagging Behind in Number Portability
"Because of troubles with the suppliers of the necessary equipment, the company will
introduce number portability only in the first half of February 2006," said Vega's
media and public relations officer Tanja Zabukovnik
Slovenia's third largest mobile operator, Vega, will not introduce portability of mobile
phone numbers as of the beginning of 2006, as demanded by Slovenia's legislation,
due to troubles with its suppliers, the company told STA on Wednesday, 28
December.
"Because of troubles with the suppliers of the necessary equipment, the company will
introduce number portability only in the first half of February 2006," said Vega's
media and public relations officer Tanja Zabukovnik.
The telecommunication's watchdog has already been informed about Vega's delay,
Tomaz Simonic, the acting director of the Agency for Post and Electronic
Communications (APEK) said on Wednesday, 28 December. According to Simic,
APEK will decide on further measures in this case after the New Year.
The remaining Slovenian mobile operators, Mobitel (the country's largest) and
Simobil (second), as well as mobile service provider Debitel have meanwhile told
STA that they are fully prepared to introduce number portability by the mandated
date.
Based on the EU-compatible act, the legislation passed on 9 August 2005 obliges
wireless providers to implement number portability by 31 December 2005, and fixedline operators by 30 June 2006 at the latest.
The expenses of technical adjustments needed for number portability have to be
covered by the operators themselves.
Iskra Management Publishes MBO Bid
Maos, a company of around 50 leading managers of electronics group Iskra,
published a bid for a management buyout of the company as a way of blocking a
hostile bid by Iskra Avtoelektrika, a manufacturer of electronic components for the
car industry
Maos, a company of around 50 leading managers of electronics group Iskra, published
on Thursday, 29 December a bid for a management buyout of the company as a way
of blocking a hostile bid by Iskra Avtoelektrika, a manufacturer of electronic
components for the car industry.
Maos would like to purchase all 6,768,038 Iskra shares, offering SIT 1,100 (EUR
4.59) a share. The deadline for the bid is 26 January 2006, unless it is extended in line
with the act on takeovers.
For the offer to be considered successful, Maos should acquire a 51% stake of the
Ljubljana-based company. The company owned by the Iskra management, however,
does not own any Iskra shares at the moment.
Meanwhile, Iskra Avtoelektrika would respond o the Maos offer only after the
holidays, as its top managers are on vacation, spokesperson of the Sempeter-based
company Erik Panjtar told STA.
Iskra Avtoelektrika published a hostile all-cash takeover bid for Iskra, which is its
largest single owner, on 15 December. It is offering SIT 1,044 (EUR 4.36) per share,
valuing Iskra at just over SIT 7bn (EUR 29.4m).
The Sempeter-based company intends to acquire all Iskra shares, but the 0.33% which
it already holds. Iskra, meanwhile, holds a 24.29% share in Iskra Avtoelektrika.
Iskra Avtoelektrika will consider its bid, which closes on 12 January at noon,
successful if it manages to acquire a 51% stake.
Prior to publishing its takeover bid, Iskra Avtoelektrika chairman Ales Nemec said
the main reason for the takeover was supply synergy and consequently faster growth.
Iskra Avtoelektrika would also like to revive the now stagnant Iskra brand, owned by
its takeover target, to its old glory, according to Nemec.
Ministry Releases New Bill on Chambers of Commerce
The Economics Ministry released on 29 December the long-anticipated bill on
chambers of commerce, whose main novelty is the introduction of voluntary
membership
The Economics Ministry released on Thursday, 29 December the long-anticipated bill
on chambers of commerce, whose main novelty is the introduction of voluntary
membership.
The new piece of legislation will replace the existing act on the Chamber of
Commerce and Industry of Slovenia (CCIS), making the CCIS its own legal
successor.
The bill is expected to be discussed by the government at its first or second session
after the New Year's holidays, STA was told spokesperson Valentin Hajdinjak.
Under the new legislation, the CCIS will have to modify its statute within five months
after the act enters into force.
While the CCIS was initially expected to be abolished on 31 December 2006 if its
assembly did not bring the statute in line with the new legislation, the latest bill does
not mention this possibility.
As its own legal successor the CCIS will remain the owner of the chamber's assets
until they are divided among other newly-established chambers.
Contrary to the present mandatory CCIS membership, voluntary membership will
enable those members that wish to step out to do so with a written statement.
The CCIS will be obliged to publish a list of its members and the total amount they
paid in membership fees from 1 January 1996 until when the new act enters into
force.
The list must also contain the share of a member's fee in the fees total, on the basis of
which members leaving the CCIS will be given a voucher of their stakes.
These will then be transferred to new chambers that will be established under the new
legislation, but only within a two-year year period from the validity of the new act.
At the same time the CCIS will have to allow other chambers to use its infrastructure
in accordance with the stake their ex-members have transferred to the new chamber.
Two years after the act enters into force the CCIS and newly-established chambers
have to reach an agreement on dividing the CCIS assets.
CCIS Calls for Unified Changes to All Chambers
The Chamber of Commerce and Industry of Slovenia (CCIS) has responded to a new
government-sponsored chambers of commerce bill by calling for unified rules for all
chambers of commerce, not only the CCIS
The Chamber of Commerce and Industry of Slovenia (CCIS) has responded to a new
government-sponsored chambers of commerce bill by calling for unified rules for all
chambers of commerce, not only the CCIS.
The CCIS has recently proposed the formation of a working group which would draft
changes to the system of chambers in the country. The group would also include
government representatives.
The chamber would be willing to accept only changes that would increase the ability
of companies to influence legislative and other conditions that affect their operations.
The CCIS stressed on Thursday, 29 December that the benefits of the current chamber
system should be retained in the new legislation.
Prior to adopting the new bill, which was unveiled by the Economics Ministry earlier
in the day, a study should be carried out on ensuring that the chamber continues to
perform its public tasks.
Drava River Power Company Satisfied with 2005
Dravske elektrarne Maribor, the company running a chain of eight hydro power
stations on the Drava river, is finishing the year with a record profit of SIT 5bn (EUR
20.9m)
Dravske elektrarne Maribor, the company running a chain of eight hydro power
stations on the Drava river, is finishing the year with a record profit of SIT 5bn (EUR
20.9m). It also renovated six of its power stations, company manager Danilo Sef has
told STA.
The company, which can be credited with 80% of renewable energy produced in
Slovenia, will look back on 2005 as a year which brought an end to a successful
renovation of all the power stations located on the upper Drava stream.
The renovation increased the company's production capacity by 67.3Mwh, which is
comparable to the performance of an additional plant. It cost SIT 50b (EUR 208.6m)
and was partly financed by an EBRD loan.
In the coming years the company is ready to take on the renovation of the remaining
two Drava plants in addition to consolidating its presence along the Mura and Sava
rivers, Sef said.
The Maribor-based company has recently extended its reach to the Mura river by
buying a small plant and applying for a license to expand its use of the river.
Its Sava river presence is secured by a 30% stake in a new hydroelectric plant project.
According to Sef, the introduction of new technologies prompted the company to
gradually decrease the number of its employees in recent years, the current 300
workers, however, seem to be an adequate force considering all the pending projects.
Sef also believes that the privatisation of the Slovenian electricity sector is bound to
happen soon, whereby he hopes that the state would keep a 50% stake plus the golden
share.
Luka Koper with Busiest Year so Far
29 December brought a new landmark for port operator Luka Koper, as the
company's ship cargo transport total for the year reached a record 13 million tonnes
29 December brought a new landmark for port operator Luka Koper, as the company's
ship cargo transport total for the year reached a record 13 million tonnes, the company
said on Friday, 30 December.
Luka Koper recorder a 4% rise in cargo transport over 2004, realising one of the main
goals of the 2005 business plan, the company added in a press release.
The number of train waggons transhiped in the port reached 163,769 this year, which
also means an increase of 50% in the last four years. The company expects the
upward trend to continue into next year.
SLOVENIA IN BRIEF
Government Dismisses Head of Money Laundering Watchdog
The government has decided to dismiss the director of the Office for Money
Laundering Prevention, Klaudijo Stroligo. Government spokesperson Valentin
Hajdinjak confirmed for STA on Tuesday, 27 December that Stroligo will be replaced
by Andrej Plausteiner, who will serve as acting director. The government decided at
its correspondence session that Plausteiner, who had worked at the money laundering
watchdog in the past, would officially take over on 1 February 2006.
2006 Active Employment Programme to Include 180,000 People
The 2006 active employment programme is to include more than 180,000 people,
Labour Minister Janez Drobnic told the press on Wednesday, 28 December,
presenting the programme which the government adopted at a correspondence session
on 27 December.
Erjavec Receives Proposals on Slovenia's Airspace Policing
The Slovenian Armed Forces General Staff has sent to Defence Minister Karl Erjavec
a set of proposals on how Slovenia would defend its airspace in line with NATO
standards, the Defence Ministry told STA on Friday, 30 December. By joining
NATO, Slovenia was incorporated into the alliance's air defence system. Having no
suitable military jets of its own, Slovenia asked for NATO support in policing its
airspace.
Insurance Watchdog Starts Procedure to Revoke Vzajemna CEO's License
The Insurance Supervision Agency launched a procedure on 29 December, to revoke
the insurance business license of Marko Jaklic, the CEO of the country's only mutual
insurer Vzajemna, the insurance watchdog said on Friday, 30 December but gave no
reason for the move. Vzajemna confirmed that Jaklic had received the watchdog's
decision, and said he had 15 days to respond to the move.