Clarification of the “secret” privatisation process
25.06.2003 18:14

In order to make the standard course of every privatisation more transparent, each of the steps that is involved in this process is presented below:

On 9.5.03, the Managing Board of OIAG received the

• privatisation mandate from the federal government. This names the privatisation candidates and defines the conditions for privatisation, such as

• maximum profit,
• securing the jobs in the enterprises,
• maintenance of the group headquarters in Austria,
• taking the Austrian capital market into account and
• ensuring research and development

• A privatisation programme was prepared by OIAG on the basis of this government mandate and approved by the Supervisory Board of OIAG on 13.6.03.

• On the basis of this privatisation programme, the Managing Board then prepares an individual privatisation concept for each company that is valid for the current year. As a part of this, preliminary talks are normally held with a wide range of potential investors, which are of course kept in the strictest of confidence. For companies that are listed on the stock exchange, OIAG is also obligated to maintain secrecy, including vis-à-vis the respective managing board, as an ad-hoc notice would otherwise have to be sent to all shareholders and as negative effects on the share price could be expected.

• For voestalpine, to use the most current project as an example, OIAG is currently in the process of preparing an individual privatisation concept and has held exploratory talks with a number of potential investors. The fact that privatisation projects are known by a codeword is standard procedure at OIAG and does not indicate any particular level of secrecy.

• Talks were held with all interested parties and had not gone beyond pure exploration with any of them. OIAG was still far from having a precise privatisation concept for voestalpine at that time, and it was not yet clear which of the variants the Managing Board would deem most appropriate.

• The privatisation procedure also stipulates that the privatisation concept must be coordinated with the Minister of Finance as the owner representative, after which the concept is submitted to the Supervisory Board of OIAG, where it is adopted, sometimes through the Privatisation Committee. In the case of voestalpine, the concept was coordinated with the Minister of Finance as a supplement to the privatisation mandate for the company, which limits the privatisation options to the stock market and financial investors.

• Once the Supervisory Board of OIAG selects and approves the final variant from the privatisation concept, the proceedings are initiated in accordance with EU regulations. This means that additional potential investors are actively invited to submit an offer, including investors from abroad. The Supervisory Board decides how, to whom and under what conditions the privatisation will be completed once all offers have been received and evaluated.

This detailed explanation clearly shows how many filters are in effect – through the Supervisory Board on the one hand and through the EU-wide invitation to submit offers on the other – in a concrete privatisation concept, thereby ensuring transparency, fairness and compliance with the pertinent legal regulations.