ZAGREB (Croatia), October 14 (SeeNews) – The Croatian government should start giving a serious thought to divesting some of its stakes in attractive companies to support its 2010 budget after a couple of fallow years in terms of privatisation proceeds, local media reported, quoting unnamed government sources.
The only real revenue gusher for the budget could come from the privatisation of state-owned equity in a major company such as insurer Croatia Osiguranje, electrical equipment producer Koncar or holding company Djuro Djakovic, as well as 100%-state owned power utility Hrvatska Elektroprivreda (HEP), online news outlet Novi List (www.novilist.hr) reported on Tuesday.
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The Croatian Privatisation Fund owned 80.27% of Croatia Osiguranje at end of 2008 and, on its own and together with the Croatian Health Insurance Institute, controlled around 25% in Koncar, according to the 2008 financial statements of the two companies.
The Djuro Djakovic holding company was 49.15%-state owned at the end of 2008, according to its 2008 financial statement.
In addition to selling 11 stated-owned hotel companies, the government will have to decide what to do with around eighty companies in which it is a majority shareholder and which are currently nothing more than a financial drag, Novi List said.
The government also controls stakes of less than 25% in several hundred companies where it is not part of the decision-making process. The divestiture of minority shareholdings began a couple of years ago and it is estimated that if the state presses on with the effort, it could earn several hundred million kuna, news daily said.
According to the sources, the sale of Croatia Osiguranje would be the easiest to pull off and it could also provide a boost to the capital market next year as, for instance, the pension funds are currently investing primarily in government bonds, Novi List said.
If the state opts to put up for sale a high-profile company that would certainly attract interest due to the dearth of quality stocks on the market, board chairman at pension insurance fund Erste Plavi Petar Vlajic told Novi List.
If HEP or Croatia Osiguranje shares are offered, the pension funds would definitely be interested, Vlajic said.
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