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Slovenia sells 55.35% of Steelmaker to Koks of Russia

The Slovenian government sold a majority stake in steelmaker Slovenska Industrija Jekla for €105 mln ($138 mln) to ZAO Koks of Russia as the state seeks to shed state assets and boost government revenue.

The government of Prime Minister Janez Jansa, which owns 80.35% of the company, sold 55.35% to the Russian mining and metals company. It will retain a 25% stake plus one share to give hold the ability to block changes to company statutes. In turn, ZAO Koks promised to invest another €250 million over the next three years, said Economy Minister Andrej Vizjak at a press conference in the capital Ljubljana yesterday. Koks „gave assurances to keep jobs, create new ones, to keep the investment cycle and ensuring further development of the company as a whole,”the government said in a press release. The sale should be completed by May.

The government, which came to power in 2004, is picking up the pace in selling state businesses after lagging other former communist countries including Hungary and the Czech Republic. The state holds about 40% of Slovenian companies and financial institutions, Finance Minister Andrej Bajuk said on February 20. Koks, a group of 15 industrial companies operating in the Urals and Siberia, beat two rivals in the bidding.

The Russian company posted net income of €171 million in 2006 on net sales of €1.8 billion, the Slovenian government said in the press release. The government also wants to sell stakes in banking, insurance and telecommunications holdings that it holds either directly of indirectly through its two asset-management funds, Kapitalska Druzba and Slovenska Odskodninska Druzba. (Bloomberg)