Comes of Age

Ing. Anna Bubenikova

Ing. Anna Bubenikova
Head of NPF rights enforcement and
Head of the Supervisory Board of VSZ Kosice

National Property Fund

Drienová 27
821 01 Bratislava

Tel.: 00 421 2 48271 242
Fax: 00 421 2 48271 384
Mrs. Bubenikova, your are the head of the NPF property rights enforcement. Can you enlighten our readers about your responsibilities at the NPF?

I am not going to introduce the National Property Fund in general, I would rather introduce the department I am in charge of. The NPF has in its portfolio several joint stock companies where we own from the very minimum up to 100% of the shares. My duty is to participate in these companies' General Meetings, to appoint their supervisory board members and to approve business plans and annual reports. Our power within the company depends on the percentage of the shares that the Fund owns.

For how long have you been in charge of this department?

Since the year 1999. The National Property Fund has been created in the year 1991 and every four years the Presidium and Executive Commitee changed according to the results of general elections. We cooperate very closely with the Ministry of Privatization, because the competences are devided according to the law.

You arrived in 1999 and we suppose that your function has evolved alongside the privatization process. To what extent have you felt this evolvement in your responsibilities?

I worked here at the department of rights enforcement since 1994 and I became the head of the Department in 1999. I came at a crucial time as we were entering a period of selling the key companies and flagships of the economy. It is a hectic and I suppose unrepeteable period in the history of the Slovak Republic. SO, in my department we establish joint stock companies out of the state owned companies and then their shares are offered to investors.

How many companies do you expect to be transformed into joint stock companies in 2002?

In the year 2001 we transformed SPP and the three electricity distribution companies into joint stock companies, those are basically the biggest companies of our economy. In the year 2002 we plan to trasform water distribution and canalization companies. Also we plan to found a joint stock company out of the SAD, the Slovak Bus Carrier Company: 49% of the company is going to be offered to investors. Between the years 2001 and 2002 we created 8 SAD companies and are planning to found 5 more.

Would you say today that the hardest part of the privatiyation process is over?

The most important period will be concluded within a year 2002. In the year 2000 we sold a 51% stake of the Slovak Telecommunications to Deutsche Telecom. We sold three major Slovak banks. Those are Slovenska Sporitelna, VUB and IRB. We sold the biggest insurance company, Slovenska Poistovna. Also we lately sold 49% of Transpetrol to the Russian Yukos. I hope to finalize the sale 49% of shares of SPP very soon as well as the sale of 49% of the electricity distribution companies and heat companies ( see details encl).

The privatization process is now almost completed. To what extent would you say the privatization of State monopolies and the restructuring of the economy over the past 3 years have enabled Slovakia to increase its credibility towards foreign investors?

All these projects have been completed with international advisors. The NPF in cooperation with the competent Ministries and the Ministry of Privatization tried to prepare the sales with transparency. I consider the proof of legacy to be the attendance of the international advisors as JP Morgan, Deloitte and Touche. I hope that the investors that have come over have had the most positive experience with the transparent sales and the friendly atmosphere. When it comes to the impact it had on the Slovakia economy, I am not competent to mention any figure. I will give the point of view that the National Property Fund has. The money stemming out of the privatization process has been used to cover up the most urgent debts and to realizate the state garanties, which was a condition from the International Monetary Fund. Money stemming from the sale of Slovenske Telekomunikacie was also used to reduce the debt of the healthcare system and to finance the development programs approved by the Government.

Today, what privatization deal are you the most proud of?

Probably VUB bank. I was a Vice Chairman of the bank's Supervisory Board when it was prepared to be sold. When the investor stepped in, I left the bank satisfied and with a feeling of a well done work. I think we managed to sell the bank successfully. Generally speaking, the restructuring of the banking sector was something that this Government accomplished very successfully.

You are also Head of the board of Directors of VSZ Kosice, which sold 25% of its capital to the American USX Corporation in November 2000. How essential was it for you to find an investor such as USX Corporation at that time?

It was a life saving act for VSZ.
The result of this take-over is outsdanding Can I get your personal feeling about the deal today, what it meant for Slovakia and also USA. We have disscused this a lot with Mr. Goodish, mergers among major international holding with the Eastern European companies do not always work that good. This example looks more like a miracle.

I came to VSZ in the year 1999, at a time where the company faced major problems. It suffered financial problems, problems with suppliers. Back those days we had to decide on a restructuring plan and get it approved by the shareholders, which was not so easy as the shareholding structure was complex. A few members of the Government contributed a lot to the success giving their support to the people behind the mainly accepted restructuring plan. Mr. Eichler at the General Meeting in September 1999 introduced an idea of selling the core business to a strategic investor and keep the remaining activities in the hands of former shareholders. There have been sceptical opinions of this process, whether VSZ would be able to survive without its core business, the steel industry. Our steel business was acquired by a very responsible investor. What is important for me now is to see that even without the steel operations VSZ has remained functional and rich as well. This was something nobody believed in at first.

What is the next step to be taken to complete the restructuring of VSZ Kosice?

The National Property Fund owns 16.46% of the remaining part of VSZ. VSZ is a company that owns and leases property to it´s doughters companies. We are in charge of a substantial amount of finances stemming from the US Steel deal and we own shares in daughter companies that are diversifying the core business. We have this idea of completing the restructuring: to find the core business and to sell the non-core activities to an investor that would be a leader in this business. We have production companies as well as companies providing services. There has been a slight change in the shareholding body, 21% shares of the VSZ have been sold. We shall see what strategy the new owners will pursue. Also the NPF has a tendency to sell some of its shares to investors. US Steel Kosice showed an interest already. It definitely will be discussed later on.

Among the activities of VSZ Kosice, what are the ones that you intend to sell in the year 2002?

The core business is considered to be VSZ Engineering, this is in charge of bridges building and foundry. Then there is VSZ Steel Service, it is in charge of providing services for US Steel. We are planning to sell companies that aren´t comsidered to be part of the core business. In the portfolio we have a fine hospital, Gastrometal, the catering services and a travel agency, and couple of cottages.

What is your vision for VSZ in five years?

I hope that it will be consolidated around the core business and to sell activities I have already mentioned. To sell them to somebody that could further develop them. The Eastern Slovakia region suffers more than 20% unemployment and VSZ has always been a determinig factor of the employment there. Also to drag there investors for a new business, for example IT technologies, something that would use the capacity of the people.

Before consdering investing in Slovakia, investors may look at parameters such as political and macroeconomical stability, the market size, the labor force, infrastructure.... How would you describe Slovakia to a potential foreign investor as far as those criteria are concerned?

I definitely would emphasize on the high qualification of the labor force. The other parameters should be improved. This is something the Minister of Economy should deal with. I know that there has been founded a special agency by the Ministry of Economy for development of industry and business. It should take care of infrastructure, amandements to the law for attracting investors and so on. I think the privatization of the natural monopolies has been succesful, what we have to catch up with is the support of small and middle sized businesses.

Could you give our readers a brief description of your professional background?

I graduated from the University of Economics, and later on I taught there. I worked at the Department of Economical Politics. I tried to establish a business academy in 1992, but that wasn´t something satisfying for me. I was appointed as a manager of the Department of the Rights Enforcement for the shareholders in 1994 and I became Head of this Department in 1999.

Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions.

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World INvestment NEws, 2002.
This is the electronic edition of the special country report on Slovakia published in Forbes Global .
May 27th, 2002 Issue.
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