September 14, 2010 / 2:48 PM / in 7 years

FACTBOX-Swedish privatisation plans as elections near

Sept 14 (Reuters) - Opinion polls ahead of Sweden’s Sept. 19 elections suggest Prime Minister Fredrik Reinfeldt’s centre-right coalition will retain power, setting the stage for a renewed push on sales of state equity assets.

This would put major stakes in blue chips such as bank Nordea (NDA.ST) and TeliaSonera TLSN.ST on the market with the proceeds denting the supply of Swedish government debt.

But a win for the Social Democrat-led opposition, trailing in opinion polls though often by a small margin, would effectively shelve privatisation plans for the coming years.

Following are key facts on Swedish state equity holdings and privatisation plans. (For analysis, click on [ID:nLDE682148])

* Prime Minister Fredrik Reinfeldt’s centre-right government has said it will push ahead with sell-off plans halted by the global financial crisis if it is re-elected, pencilling in privatisation proceeds totalling 100 billion Swedish crowns ($14 billion) in the four-year term of office ending in 2014.

* The centre-left opposition bloc, led by Social Democrat Party Chairwoman Mona Sahlin, has said it does not see any asset sales should it win elections. An exception would be made should a suitable buyer emerge for troubled Scandinavian airline SAS (SAS.ST), in which Sweden owns an 21.4 percent stake.

* Reinfeldt’s “Alliance” bloc has said it will consider selling the state’s 19.9 percent stake in Nordic bank Nordea, its 37.3 percent stake in telecom operator TeliaSonera as well as wholly owned mortgage lender SBAB [SBAB.UL] and bring in a minority shareholder for utility Vattenfall [VATN.UL].

It has also said it would consider selling SAS once the airline had firmly turned the corner on years of losses.

* The centre-right has said any Vattenfall minority stakeholder would have to be a responsible, long-term owner, suggesting the state AP pension funds as potential candidates. However, AP fund investment restrictions would prohibit them from taking any significant Vattenfall stake unless the company was listed or their mandate changed.

* The government has estimated the total value of direct state ownership of corporate assets at about 620 billion Swedish crowns ($85.2 billion). Pretax earnings at state-owned firms surged 42 percent year-on-year to 35.2 billion crowns in the first half of 2010.

* The holdings make the state one of Sweden’s top corporate shareholders. The centre-right government says the state should not own firms competing in commercial markets, while the centre-left opposes a sell-off, also on ideological grounds.

* Over the past term, the government sold off 119.1 billion crowns worth of assets -- an 8 percent stake in TeliaSonera, its entire stake in exchange operator OMX and fully state-owned real estate group Vasakronan and Absolut Vodka maker Vin & Sprit.

* The brunt of proceeds from the privatisation would, as was the case over the past term, go towards paying down Sweden’s already limited public debt. Sweden is seen running the smallest public deficit in the European Union this year and returning to surplus in 2011 or 2012.

* The Debt Office said in June it would cut issuance of all types of debt due to unexpectedly strong public finances, saying borrowing would fall to 100 billion crowns next year from 105 billion in 2010. Asset sales would chip away further at the government debt, leaving an even smaller borrowing requirement.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below