STA, 6 December 2019 - Gabrijel Škof, the new chairman of Slovenian Sovereign Holding (SSH / Slovenski državni holding - SDH), believes the strategy for managing state assets needs to be revised and adjusted to the changes in the portfolio as well as economic and political changes.
The strategy for managing state assets was adopted in 2015 and a lot has changed since then in SSH's portfolio and also in business and politics, he said. "This alone is reason enough for a new strategy," Škof said in an interview with the STA.
He thinks the Finance Ministry is also aware of that, which is why talks on this had been under way even before he took over at SSH.
Now, the results of those talks will be revised and then the views of the new management will be sent to the ministry again, said Škof, former chief executive of insurer Adriatic Slovenica, who was appointed SSH chairman in August.
In 2016, SSH proposed changes to the classification of assets. Škof admits this is partly a political matter but thinks the valid strategies for individual fields must be taken into account here and that the classification must reflect that too.
Škof believes transferring the strategic investments to the state, which is envisaged by the end of 2020 by an amendment to the 2017 Slovenian compensation fund act, would mean that SSH would lose its financial independence and its independence in general.
Talks on this are under way with the finance minister, as the sources of the holding's financing will subsequently have to be determined anew.
"With the transfer of these investments SSH will lose its financial independence. Maybe somebody would say it will not lose its independence as such but I think these things are quite connected," Škof said, pointing to the OECD's guidelines for managing state-owned companies.
The SSH management is "pretty sure" that plans regarding the return on equity (ROE) in companies in which the state has a share will be realised. The ROE is to reach 5.9% in 2020.
"Even if the goal is 0.3 percentage points lower than the projection for this year, given the circumstances, a 5.9% profitability is quite optimistic," he said.
He expects no major impact from the projected slow-down of economic growth in 2020, so this was only part taken into account in the projections for 2020.
However, the slow-down is already starting to affect some areas, for example the transshipment at the port operator Luka Koper, cargo transport on roads and railways, and in particular orders in the automotive industry.
SSH meanwhile still awaits a government decision on the management of state investments in tourism.
Škof finds the proposal on the setting up of a state hospitality fund, tabled in July, sensible, given that the state holds a significant share in tourist companies. Currently, there is no synergy among them because they are so fragmented, he said.
He believes it would be best for SSH to manage the fund, but this would require some staffing reinforcement. "With the results we have been achieving in recent years, we have proved we can manage companies and increase profitability."
Škof also supports the idea about a potential entry of private capital into the fund's ownership. He could not, however, say how big a share of the fund could be offered to such investors.
