BRATISLAVA – Slovakia closed the largest selloff in its history on Thursday, agreeing to sell 49 percent and management control of the key Russia-Western Europe gas link, SPP, to a German-French-Russian group for $2.7 billion. A consortium of Gaz de France, Russian Gazprom and Germany‘s Ruhrgas, the sole bidder in the privatisation, will assume the management of Slovensky Plynarensky Priemysel (SPP), which moves 70 percent of the Russian gas used in west Europe. As well as pipeline operations, SPP serves 1.3 million Slovak gas customers.

One of the largest selloffs of state assets in east Europe, the deal has kept the Slovak market on tenterhooks as opposition parties and cabinet leftists pledged to scupper the deal, balking at the $2.7 billion price tag they said was too low. The privatisation is a crucial pillar to the government‘s economic platform, with the proceeds already earmarked to be split between retiring state debt and financing wide-scale restructuring of Slovakia‘s shaky pension system. The sale hit its last snag on Wednesday, when the leftist SDL party, a member of the five-party governing coalition, delayed its approval. The government finally agreed the deal at an extraordinary session on Thursday.

With Slovakia heading into an election in September, the SDL wanted to ensure it was not seen gifting the family silver to foreign interests and pledged to do everything possible to halt the deal. But SDL Deputy chairman Lubomir Fogas said most SDL ministers in the end had also voted to approve it.

The closing of the deal is expected around the end of April. The single bid at first disappointed some observers who had expected more interest in the deal. But analysts were somewhat relieved by the government‘s approval, following clashes between Dzurinda, SDL and the opposition that had sometimes put the sale in doubt.

Political leaders and analysts alike also hope the move will clean up SPP‘s image as a breeding ground for corruption and political chicanery, which many state-controlled firms have been accused of being in the past. SPP has been mired in several murky events in the last decade such as the gangland-style killing of former SPP CEO Jan Ducky. The case is still unsolved, although police say the slaying may have been connected with his activities as SPP head.

Dzurinda hopes the sale will also go a long way in boosting his cabinet‘s standing within the country as the election looms.

Reuters