News 26. 4. 2024

10th Anniversary of Slovenian Sovereign Holding

Ljubljana, 26 April 2024 - Slovenian Sovereign Holding (SSH) formally came into existence on 26 April 2014, with the enactment of the Slovenian Sovereign Holding Act, which mandated its establishment, status, role, and governance instruments. After ten years since its establishment, the impact and effects of this institution on the management of state assets in Slovenia can be assessed. Throughout this period, dividends disbursed by companies under SSH management totalled EUR  2.1  billion, with EUR 1.7 billion received by the Republic of Slovenia and EUR 0.4 billion by SSH. During its operational tenure, SSH has disposed of capital assets totalling EUR 1.5 billion. The highest ROE achieved was 10.2% last year.

A Decade in Figures

Dividend payments from companies under SSH management amounted to EUR 2.1 billion from SSH’s inception until the close of 2023. Of this sum, the Republic of Slovenia received EUR 1.7  billion, while SDH received EUR 0.4 billion. Throughout its operational tenure, SSH divested EUR 1.5 billion in capital assets, with EUR 1.3  billion attributed to bank divestments. The ROE of the portfolio fluctuated over the years. The low point was recorded in the inaugural year, standing at 1.8%, while the peak was attained last year, and is currently estimated at 10.2%.

The book value of capital assets under management was EUR 11.6 billion at the conclusion of 2014 and currently stands at EUR 12.2 billion. Strategic assets prevail by value, with their share rising from an initial 67% to nearly 80% by the end of 2023. Important assets constituted approximately 15% of the portfolio by the close of 2023, with the remainder comprising portfolio assets. Following the merger with the Bank Assets Management Company (BAMC) at the end of 2022, SSH also acquired claims and tangible assets for management. The book value of claims amounted to EUR 206 million at the end of 2023, while the book value of tangible assets was EUR 94 million.

Transfer of Assets from AUKN to SOD, Merger of PDP, and Capital Assets of DSU

The Slovenian Sovereign Holding (SSH) was established with the aim of separating the state's role as the owner of capital assets from other state functions, centralising the management of state capital assets, improving corporate governance, and increasing efficiency and transparency in managing these assets. Key events before the establishment of SSH included the founding of the Capital Assets Management Agency of the Republic of Slovenia (AUKN) in the autumn of 2010, which represented the initial establishment of a centralised system for managing state assets. Following its dissolution at the end of 2012, the assets and staff were transferred to the Slovenian Compensation Company (SOD), the legal predecessor of SSH. This transfer, alongside the merger of PDP, d.d. and the acquisition of capital assets owned by DSU, d.o.o., marked another step towards consolidating and centralising the management of state assets under one roof.

First State Capital Assets Management Strategy adopted in 2015

The adoption of the State Capital Assets Management Strategy was a significant move towards systematising and professionalising the management of state assets in Slovenia. It also determined the classification of state assets into strategic, important, and portfolio assets.

The document, still in effect today and undergoing revision, sets out long-term objectives and guidelines for the management of state assets. The key tasks and development priorities of SSH will also be outlined in the new State Capital Assets Management Strategy, the adoption of which is anticipated this year.

Merger with BAMC

Undoubtedly, the merger with BAMC holds significant importance for SSH. Not only did this action result in additional assets for SSH by the end of 2022, but the number of employees also more than doubled. Following the merger with BAMC, SSH comprehensively adjusted its management policy due to the inclusion of new types of assets, namely claims and real estate. This entailed the renovation and adaptation of developmental priorities, organization, business processes, and even leadership methods.

Strengthening Corporate Governance at the Level of SSH and at the Level of Portfolio Companies

Strengthening corporate governance at both the SSH and company levels is one of SSH's central objectives. The institutional framework for governance was painstakingly constructed over the course of approximately 14 years, with considerable efforts and intermittent transformations and mergers contributing to this process.

In 2023, instruments regulating the field of corporate governance at SSH were significantly revised and supplemented, including the Rules on the Assessment of Potential Candidates for Members of Supervisory and Management Boards of SOEs, which elaborates on the conditions, criteria, and procedures for evaluating and determining the suitability of potential candidates for members of supervisory and management bodies of companies with state capital assets.

Moving forward, SSH's key objectives, tasks, and priorities in the area of strengthening risk management functions and internal controls in SOEs remain essential, ensuring the enforcement of high standards of business transparency and disclosures by companies. SSH will advocate for long-term strategic objectives by focusing on the implementation of ESG factors and adopting sustainable business models and strategies aimed at reducing the impact of climate change and developing policies that mitigate strategic, operational, and financial risks to enable the formation of a portfolio which is resilient in the long run.

On the occasion of SSH's tenth anniversary, it is affirmed that this institution has played a crucial role in transforming the way the state manages its companies. In the years to come, the continuation of these efforts is crucial, with the aim of becoming an even more active, responsible, and long-term-oriented manager of state assets, consistently increasing the value of state investments and regularly providing stable dividend income to the budget.

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