Hungary issues state control list

BUDAPEST (Reuter) - Hungary has decided to maintain state control over much of its energy, telecommunications and transport sectors, and to keep only minority stakes in all but a few large industries and banks.

The government yesterday unveiled a final list of about 160 enterprises it will keep fully or partially in long-term state ownership.

As expected, it reserved an absolute state majority in its main oil company, telecommunications firm and airline.

But it limited the state's stake in large industrial, steel and aluminium companies to 25 per cent plus one vote, and made no mention of earlier suggestions that some companies or branches should remain in Hungarian hands, even if privatised.

The 25 per cent ceiling applies to all but one of the large state chemical and pharmaceutical companies. Hungary's new banking law had already forced the state to reduce its ownership of banks to below 25 per cent by 1997.

A new state holding company, State Property Management, will group the state's long-term equity stakes in companies that are of strategic importance or that need significant overhauls before they can be sold off.

The old State Property Agency will retain responsibility for selling off other state enterprises.

Katalin Kardos, a director of the holding company, said it was not yet clear whether its units would receive subsidies from the state or be allowed to subsidise one another.

She declined to estimate what percentage of state property would end up under the new holding company's aegis.