Privatisation

Since 1993, according to the spirit of the government declaration, privatisation acquired priority with the anticipation that the new transparent owners will be able to implement restructuralisation.

For the metallurgical plants, this path has a number of bottle-necks. Those led to privatisation failure in years 1993 to 1995. The failure was mainly due to underestimation of the criteria and conditions of public tenders (the offering price does not need to characterise by far the quality of business plan) and owing to not entirely high-quality legislation (e.g. control of implementation, privatisation bottle-necks and negative examples).

In the Slovak Republic, coupon privatisation was carried out. In the Czech metallurgy, coupon privatisation was left practically for the so-called 2nd round in 1994. The government took account of the opinion that it is not reasonable to split fully the property of the steel industry - especially its basic production departments in the integrated iron and steel works - among tens of thousands of small shareholders. Therefore, only approx. 30 % of the property of these enterprises was assigned for the 2nd round of privatisation. The standard methods of privatisation are, however, of importance in metallurgy as they join privatisation with restructuralisation what is necessary for present situation in metallurgy.

As to privatisation flow until now, it may be stated that the sales of enterprises have been realised to date rather through sales to a single owner whatever its legal form might have been. It is, naturally, a problem in case of big integrated iron and steel works to find such a potential buyer at all. Therefore, the government decided in case of both only partly privatised integrated iron and steel works (VÍTKOVICE, a.s. and Nová hut, a.s.) to apply a new privatisation practice based on the option of the present management to buy 1 + 10 %. This right was bound to reaching the restructuralisation targets. Foreign capital interest resulting from privatisation is small in the Czech steel works. From the viewpoint of sharing, Sandvik Precision Tubes and ZDB are significant.