Wednesday, May 18

The government will buy shares in the name of the climate. But the first trade can be in Norwegian.

Motivated on the basis of achieving climate goals, the Minister of Trade and Industry warns that the state will increase its ownership in the business community. Nevertheless, it may soon be the airline Norwegian that he first becomes the owner of.

Minister of Trade and Industry Jan Christian Vestre aims to use the state’s ownership power to accelerate the green shift.

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Minister of Trade and Industry Jan Christian Vestre says he will use the entire business policy toolbox. This is to accelerate a shift in the Norwegian economy in a green direction.

One of these instruments is to make more out of the already large state ownership in Norwegian business and industry. See the overview of the most valuable ownership items.

Announces new goals for ownership

The state has today divided its ownership into three categories. Some of the smaller companies under Vestre have defined so-called sector policy goals. Examples of such companies are Siva and the Norwegian Seafood Council.

For the big ones partly owned, the listed companies have the state’s own justifications for each company. But the common name is that the reason is to secure Norwegian head office. And the goals are for everyone “the highest possible return over time”.

Vestre announced in an interview with E24 in January that it is more likely with increased state ownership with him as Minister of Trade and Industry than less.

Now he says to Aftenposten / E24 that he does not rule out buying into the state-owned companies or establishing completely new state-owned companies.

Must have new reasons

Vestre has also previously told Klassekampen that he is considering a separate, state-owned hydrogen company.

But for there to be any point in buying into the partly owned, Vestre must have new justifications and goals.

For the head offices, everything is secured with the current ownership shares. And one should look closely to find some research that indicates that increased state ownership in itself will generally improve the chances of higher returns.

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Climate can be a new reason

– What other reasons may be relevant?

– It can be about climate and environment or more technology development. For example, green industries that are not necessarily profitable tomorrow, but which are highly likely to be very profitable in the long run. Where the community will be able to have a more long-term dimension than private ones, says Vestre.

– Will private capital not always flow in if there is a high probability of future profitability?

– It completely depends on when private capital believes that profitability is delivered.

– Then you must believe that you are better at predicting future profitability than what private capital is?

-I am not saying that we are necessarily better at preaching it, but I give some examples of how we can think long-term and create potential value for the community. The idea is not that we should displace private initiatives with state ownership, Vestre answers.

– But there are many examples of how the combination of private and state capital can help accelerate a desired development.

Jan Christian Vestre keeps it more open than what his predecessor Iselin Nybø (V) did, if the state can become the largest owner in Norwegian.

Can be the largest in Norwegian

The airline Norwegian is hardly at the top of Vestre’s agenda in all the focus on the green shift.

But a possible ownership in Norwegian can still be a hot political potato to deal with for him.

The state can all next year be Norwegian’s largest owner ahead of John Fredriksen.

Because at today’s share prices, it will pay to convert a government billion loan to the airline into shares. This must be done between May 2023 and May 2025.

Vestre’s predecessor Iselin Nybø (V) told Aftenposten / E24 that she would sell out of the loan before it could be exchanged for shares.

Vestre, on the other hand, keeps the possibility of becoming the largest owner in Norwegian open.

– I have no ideological blinders on. I can therefore not now say whether it will be relevant to sell part or all of our share of the hybrid loan before May 2023. Or whether we will advocate a conversion to shares or a combination of these.

– A good owner always considers his options, says Vestre.

New ownership announcement all this spring?

Vestre will present a new ownership report this year.

Before the report is presented to the Storting, he will invite to several seminars. There, academia, business and public debaters will be able to provide input.

Vestre is also considering coming up with several so-called ownership expectations for the companies. There will then be stricter requirements for climate goals and reporting, HSE, ethics and wage moderation.

– This is not about us intervening in the operational operations. It is up to management and control. The division of roles is the basis. But we as owners can set expectations for the companies, he says.

Vestre wrote in his time one master’s thesis in law on state ownership and division of roles.

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