Following on from my previous post regarding the postponement of the most recent attempt to kick-start the privatisation of Adria Airways, news has today broken that SDH and PDP, two state-owned investment vehicles and publically owned bank DUTB have initiated proceedings by signing a memorandum of understanding to offload their aggregated 91.58% of Slovenia’s national flag carrier.

A situation that has become increasingly fluid, dictated in the main by the perceived notion that privatisation of state-owned institutions will prove to be a financial panacea to cure many of Slovenia’s economic woes, nevertheless, has only seen three of the fifteen earmarked companies pass into private hands. Slovenian opposition parties strenuously object to the family silver being auctioned off to the highest bidder; The United Left party in particular are seeking public consensus on which companies should be jettisoned and equally those to be ring-fenced by the state. With the momentum though now being with those within Slovenia’s incumbent administration positing pro-privatisation sentiments, such pleas for public-approval appear to be nothing more than wishful thinking, with Telekom Slovenia and banking giant Nova KBM the next in line.

It should though of course be remembered that whilst a tripartite agreement between the relevant parties to sell their considerable combined stake in an ailing airline is one thing, attracting investors with the appropriate financial reach for a commercial carrier that operates many of ‘its’ fleet only after a sale and lease back agreement has been entered into is, quite another. There are surely far more attractive investments out there, which would suggest that those opposed to the privatisation of Adria Airways might not for sometime yet see their worst fears realised.

Reporting on this issue can be found at:

RTV Slovenia: Adria Airways privatisation update

Reuters: Majority shareholding of Adria Airways to be offered