New Act on Airport Companies in Slovakia before Privatization

In 2003, the Slovak government approved a Project of Transformation of Slovak Airports Administration Body (“SAA”). The Project focuses mainly on restructuring, decentralization and optimation of operation of state-owned airport administration.

The Project was followed by a new legislation - the Law on Airport Companies which came into effect as of April, 2004. The new Law serves as a legal basis for transformation of the state SAA, administering and operating six international airports (Bratislava, Kosice, Poprad, Sliac, Piestany, Zilina), into independent joint stock companies, so called airport companies, founded by a sole founder – the Slovak state. From the estate administered by SAA, individual parts will be earmarked for placing into separate joint stock companies which will then operate individual airports. Under the new Law, a part of the airport infrastructure is considered a priority infrastructure property. Consequently, any disposal of such property is limited so that it is excluded from being subject to any pledge or security, nor ican it be transferred to any third person except for the state or the airport company. (As an aside, we may dispute whether the above restriction is discriminatory, and thus in contradiction with Slovak Constitution).

A separate issue is the transfer of the state’s stake in the airport company to third persons, and the participation of the state in airport companies must be always a permanent one within the scope set out in the decision of the Slovak government.

In the case of small airports, the Law enables transfer of airport infrastructure but only to a local municipality based upon mutual agreement.

The state is the only entity that may found Slovak airport companies. The airport companies can only be in the form of joint stock companies with shares in the form of book entry name shares. When privatizing state shares in airport companies with priority infrastructure property a permanent participation of the state must be safeguarded within the scope of the decision approved by the Slovak government.

This new legislation is the first step towards privatization of the airports in Slovakia, and thus enables new players to enter the booming air traffic market in Slovakia. According to the Ministry of Transport, two of the airport companies (Bratislava, Kosice) are already in the incorporation process. Shortly after their registration with competent registration courts, the Ministry is planning on publishing international tenders for strategic investors for both airport companies.