New SSH Management Board is focused on achieving targeted ROEs from RS and SSH capital assets portfolios
Ljubljana, 3 December 2015 – The operation of new SSH Management Board will be focused on achieving targeted ROEs from the Republic of Slovenia (RS) and Slovenian Sovereign Holding (SSH) capital assets portfolios. The objective set in the State Assets Management Strategy in regard to the profitability of the RS's portfolio of assets and the SSH's portfolio of assets is achievable with a suitable portfolio structure and serious sectoral restructuring having been put in place. The corporate governance system for state-owned enterprises has been established and all legal documents which include State Assets Management Strategy, State Assets Management Annual Plan, Performance Criteria for SOEs, Corporate Governance Code and Assets Management Strategy, are ready. This will enable future focus to be fully placed on the supervision and implementation of corporate governance systems and best practices to be performed at the level of SOEs, together with prudent supervision over SOE's performance results. SSH will continue to implement all statutory and contractual obligations in a regular and timely manner.
Since taking up the post of the new Management Board at the end of October 2015, the main objective of the new Board has been to prepare by SSH, in accordance with ZSDH-1, the 2016 State Assets Management Annual Plan on the basis of the State Assets Management Strategy. The 2016 Asset Management Annual Plan has been submitted to the Ministry of Finance for the consent of the Government of the Republic of Slovenia to be obtained. The said Plan defines detailed goals which are to be achieved by SSH in the management of individual capital assets, together with measures and policies for attaining these goals. The SOEs Performance Criteria is another document which has been waiting for the consent of the Government of the Republic of Slovenia to be granted. All of the above mentioned documents, including the Corporate Governance Code for Companies with Capital Assets of the State, Asset Management Policy and Slovenian Sovereign Holding Act (ZSDH-1), form an integrated basis for an efficient management of state assets and provide a platform for a focus to be fully placed on the implementation of corporate governance systems at the level of companies, in addition to providing guidelines for executing supervision over SOEs' performance results. The nomination of professional and well-experienced members of Supervisory Boards who are characterised by strong personal integrity and business ethics will remain one of key duties in the management of assets and an important factor in ensuring performance results.
The operation of the new SSH Management Board composed of Marko Jazbec, the President of the Management Board, Nada Drobne Popovič, MSc, the Member of the Management Board, and Anja Strojin Štampar, the Member of the Management Board, will be especially oriented at increasing the profitability of the Republic of Slovenia's portfolio. The long-term vision of SSH is generating value for the owner from capital assets. The main focus of the new Management Board's future term of office will therefore be placed on achieving the returns on equity (ROE) targeted for the RS and SSH capital assets portfolios as laid down in the State Assets Management Strategy. Nada Drobne Popovič, MSc, the Member of the Management Board said: "The objective of attaining 8% return on equity (ROE) for the RS and SSH portfolios by 2020 is achievable by having a suitable portfolio structure in place and providing for serious sectoral restructuring." One of key tasks for 2016 will be to re-define the sectoral strategies together with line ministries and to restructure the portfolio of assets under management in order to attain the goals set. Slovenian Sovereign Holding will provide for the professional competence and expertise of the management by setting high standards and applying the best practices in the management of enterprises and by implementing constant activities for increasing the corporate governance culture in SSH and at the level of companies.
Marko Jazbec, the President of the Management Board, said: "Slovenian Sovereign Holding will act as a determined and demanding owner. The focus on active management of capital assets and allocation of resources and energy into elements resulting in the highest value for the owners of capital assets will be of key importance. Our common goal is to increase a relatively good profitability levels obtained by assets in SSH ownership and to significantly increase ROEs of capital assets owned by RS and to gradually follow and get in line with the ambitious goals set in the State Assets Management Strategy".
Slovenian Sovereign Holding is active in carry on the processes of sale of companies which have been initiated in the following enterprises: Adria Airways, d. d., Cimos, d. d. and Paloma, d. d., and the process of the sale of NKBM has reached its final phase. The year of 2016 will see SSH implementing its activities in connection with the process of sale for which the consent will be granted by the Government of the Republic of Slovenia; specifically, for the following SOEs: NLB, d. d., Unior Zreče, d. d., Cimos, d. d., MLM, d. d., and for other portfolio assets. Slovenian Sovereign Holding will continue to conduct all processes regarding the sale of companies in accordance with the international practice in this field, in a professional and transparent manner taking into consideration legislation, the internal SSH rules and the European privatisation guidelines and EU rules on state-aid. Anja Strojin Štampar, the Member of the Management Board said: "In 2016, the most energy and resources will be allocated to activities in connection with the process of sale of the largest Slovenian systemic bank, NLB, d.d., in which regard, one of the goals of SSH is to fulfil all the processes of sale as required by the Republic of Slovenia's commitments given to the European Commission."
Slovenian Sovereign Holding continues to actively participate in denationalisation proceedings and in procedures for the determination of compensation for beneficiaries in which property has been restituted to denationalisation beneficiaries in kind (Article 73 of Denationalisation Act). There are 293 claims currently being recorded as pending and some new claims are expected by SSH yet to be lodged. Only the most complex denationalisation cases are still being handled.
Slovenian Sovereign Holding will dedicate all the necessary attention to effective asset and liability management. SSH will continue to implement all statutory and contractual obligations in a regular and timely manner. The last coupon of the SOS2E bond matures on 1 June 2016 which will end the 20-year period of settling liabilities arising from the one of the most tradable bonds in the Slovenian bond market.
To summarize, guidelines established by the new Management Board when taking up the office are as follows:
- to improve the image of Slovenian Sovereign Holding as a professional state assets manager by constantly and consistently observing and implementing statutory asset management principles and State Assets Management Strategy;
- to increase the quality and analytical value of information platforms needed for the management of capital assets and to play an active role in the financial and business restructuring of assets, together with providing for corporate restructuring with the aim of increasing the value of assets, thus ensuring comparable rates of returns and achieving other legitimate strategic goals;
- to carry on the privatisation processes and to increase the efficiency of the disposition of assets and prudently acquire new assets;
- to increase the quality of risk management and internal control environment;
- to conduct professional and traceable communications and exchange viewpoints with representatives of all the most important SSH stakeholders, in accordance with the provisions of Article 67 of ZSDH-1.
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