update von fassung drchina 131196

1
INDEX

• History
• Structure of OIAG
• Organisation of OIAG
• Privatization

2
Supervisory Board of ÖIAG
10 Shareholder 5 Employee 4 Experts for
privatisation representatives representatives
Appointed by Ministry of Finance
Federal chamber 2 by Federal chamber
of labor (Bundes- of labor
arbeiterkammer) 2 by Federal
chamber of commerce
1 direct
representative of the Ministry of economy
affairs 1 direct representative of the Ministry
of Finance Supervisory board members with
voting right Advisor no voting right
3
The Austrian joint stock corporation
(Aktiengesellschaft)
Supervisory board Minimum 3 members Appoints,
removes and (Aufsichtsrat) (Chairman, Vice
chairman) supervises the Management
board, but is normally not
entitled to give directions Management
board 1 or several members Responsible for
day-to- (Vorstand) day management and
corporate policy Shareholders general
elects Supervisory board meeting
members (Hauptversammlung) At
ÖIAG the general shareholders meeting consists of
the Republic of Austria represented by the
Ministry of Finance.
4
Shareholders general meeting

• adopts Memorandum and Articles
• elects and removes Supervisory board members
  (except for employee
• representatives)
• decides increase or reduction of capital and
  eventual disapplication of
• shareholders pre-emption rights in the issue of
  new shares
• discharges Supervisory board
• appoints auditors
• decides profit distribution
• decides dissolution of the company, merger into
  another corporation and
• fundamental change of business

5
Supervisory Board

• size according to capital of the corporation
• supervises the Management board
• has the right to request reports by the
  Management board and to inspect the
• accounts and assets of the corporation
• appoints and removes the Management board
• diligent discharge of responsibilities towards
  shareholders
• 1/3 of the members employee representatives

6
Supervisory Board

• Management board has to seek the Supervisory
  boards consent for major
• transactions, such as
• - acquisitions and sale of companies or interests
  therein, acquisition and
• sale or closure of companies or plants
• - acquisition, sale and mortgaging of real
  estate
• - establishment and closure of subsidiaries
• - investments above certain limits
• - taking or granting of loans above a certain
  amount to be specified
• by the Articles of Association
• - opening or closure of business or production
  units
• - setting of general principles of business
  policy
• - setting of principles for profit or turn-over
  related renumeration and pension
• grants to leading employees
• - grant of a power of procuration
• Additionally, the Articles may provide that the
  Supervisory boards consent is also
• necessary for other matters.

7
DECISION FLOW
Parliament
Reports
Appoints the Supervisory Board
Minister
Stock company
ÖIAG
Stock company
Presides inSupervisoryBoard
OMV, VA Stahl etc
Limited liability comp.
Company(Subsidiary)
8
Organisation and administration for the
nationalized industry
Organisation Political responsibility 1946-5
9 Ministry for transport and public
economy 1959-66 Chancellery 1966-67 Mi
nistry for transport and public
economy 1967-70 Limited comp.
"Österr. Ministry for transport
Industrieverwaltungs and public economy
GmbH (ÖIG)" as trustee for the Republic of
Austria
9
Organisation and administration for the
state-owned industry

• Organisation Political responsibility
• 1970-86 OIAG (Austrian Industries Federal
  chancellery Holding Comp.) joint
  stock company speciality super- visory
  board reflects socio- political landscape of
  Austria
• 1986-93 politically indipendent Ministry for
  transport and supervisory board
  members public economy
• 1993 New OIAG-law changes task Ministry for
  transport and of OIAG OIAG shall no
  longer public economy form an industrial
  conern, but shall privatise the majority of
  its companies. OIAG shall remain minority
  shareholder of the most important industrial
  companies of Austria.

10
History of the state-owned industry

• 1946 First Nationalisation Law approved by all
  parties in parliament (conservative people
  party, socialist party, communist party)
• 1950-1970 Period of economic boom
• high level of demand
• high production level
• high capital expenditure
• full employment
• increasing wages
• high social benefits (f.i. company pension
  schemes etc.)

11
History of the state-owned industry

• 1970-1985 economic decline
• increasing competition
• worldwide recession (oil price shock 1973, 1975)
• political influence on nationalised companies to
  maintain employment level by diversifiing into
  new production areas
• merger of carbon special steel firms (VOEST
  ALPINE)
• economic problems of Voest-Alpine because of
  losses in the new production areas

12
History of state-owned industry

• 1985-1987
• government changes management of Voest and ÖIAG,
  big enterprises are split into legally
  iandependent market oriented companies
• parliament approves a large capital injection,
  imposing that it will be for the last time and
  that further new capital could only be raised by
  privatisations
• Restructuring of Voest-Alpine
• - decentralisation devisions are split into
  legally indipendent business units

13
History of the state-owned industry

• 1987-1989 Reorganisation and Consolidation
  period
• 1990-1992
• general economic upswing
• Austrian Industries group issues convertible
  bonds, intending to convert them into shares
  within 5 years
• Internationalisation of the group by an
  aggressive acquisition policy

14
History of the state-owned industry

• 1993
• recession lowest steel-price of the cycle,
  lowest aluminium prices since the 1950ies
• aluminium group of Austrian Industries is nearly
  bankrupt due to the worldwide aluminium crisis
  and too expensive acquisitions OIAG as the
  mother Company of Austrian Industries can no
  longer carry its debt burden and has to be helped
  by the state.
• government passes a new law OIAG gets a
  subordinated loan, repayable after repayment of
  bank loans. All liabilities have to be paid back
  by privatisation revenues.- ÖIAG shall privatise
  all its companies in due time. The companies and
  the extent to which they shall be privatised
  are determined in the law.- Austrian Industries
  has to be merged with ÖIAG. ÖIAG shall no
  longer form a conern.

15
Debt Reduction
bn ATS bn Euro
?) OIAG Net Debt as of 31.12.93
Privatisation proceeds ÖIAG Net Debt as of
31.12.99
22,2
1,61
-22,8
- 1,66

0
0
?) Additional ÖIAG Privatisation Proceeds
8,1
0,59
?) PTBG Debt as of 31.12.1996
Privatisation Proceeds minus interest
PTBG Debt as of 31.12.1999
50,0
3,63
21,0
1,53

29,0
2,11

?) Old ÖIAG Debt to be payed back by further
privatisation proceeds
46,2
3,36