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. Last Updated: 07/27/2016

Locals Invest in Hungary

BUDAPEST -- Local investors spent more than cash-rich foreigners to buy stakes in enterprises from Hungary's State Property Agency, or SPA, last year, reversing a trend that had become a political headache for the government.

Figures released Thursday by the SPA, charged with selling off enterprises in which the state will not keep long-term stakes, showed local investors snapped up more than two-thirds of the property the SPA sold in 1993.

SPA sales raised 77.90 billion forints ($761 million) last year, up from 74.56 billion in 1992.

The figures do not include sales by state holding company AV Rt, which groups strategic companies that will remain mostly or partly in long-term state ownership.

SPA figures show foreigners paid hard currency worth 25.50 billion forints for stakes in SPA companies last year, just under a third of total revenue. In 1992, hard-currency payments accounted for 55 percent of revenue.

Local investors' cash payments actually dropped slightly, but purchases via loans and compensation coupons awarded to victims of property nationalizations helped swell domestic participation in the privatization process.

In March the government will launch a new privatization program targeted specifically at small retail investors.

In 1993 the SPA's expenditures slightly surpassed total revenues. Repayment of public debt was the biggest single expense, followed by corporate reorganizations.

As of the end of 1993, a total of 328 foreign companies had invested in Hungary through the SPA. Ninety-six Austrian companies topped the list with 118 investments, followed by 65 German, 33 French and 29 British firms. Of some 2,000 enterprises the Hungarian state owned in 1989, the SPA had sold 404 entirely, majority stakes in 144 and minority stakes in 41 by the end of last year.