Resolution of the Malev ownership issues appear to be at hand giving the state 95% of the national carrier

Published: 8/4/1999

Hungary's Finance Minister is expected to sign a share repurchase contract between Hungary's privatisation agency on one side, and OTP Bank and the Hungarian Foreign Trading Bank on the other, as a result of which state ownership in Hungary's national airline Malev will rise 35pc to 95pc, Gyula Gansperger, chairman and managing director of the State Privatisation and Holding Company (APV) told a press conference on Thursday 29th July. The boards of APV and the two commercial banks have already approved the draft contract. APV will make its payments in instalments. Mr Gansperger neither denied nor confirmed press reports that the purchase price is USD 65m plus interest, which is lower than LIBOR plus 50 basis points. The Finance Minister's endorsement is necessary because the deal is just too large, Mr Gansperger said. According to the legal stipulations, government approval is necessary for payments above a certain value if it is made from APV's reorganisation funds or reserves. However, according to Econews APV will pay from funds earmarked for pre-privatisation costs. Therefore, the signature is formally unnecessary, and in fact it is tantamount to a government guarantee.

Article ID: 726