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EC to press for sale of Slovenia's NLB life insurance unit - report

Author Iskra Pavlova
EC to press for sale of Slovenia's NLB life insurance unit - report Slovenia's NLB Vita, Photo: Jure Erzen

LJUBLJANA (Slovenia), August 20 (SeeNews) - The European Commission will most likely ask Slovenian lender Nova Ljubljanska Banka (NLB) to sell its life insurance unit NLB Vita because of a delay in its privatisation agreed with the EC under a 2013 state aid procedure, local media reported.

NLB, which owns 50% of NLB Vita, will allegedly sell its holdings together with the other owner of NLB Vita, Belgium's KBC Insurance NV, news daily Delo reported on Monday, citing unofficial information.

"The obligation to sell NLB Vita is still valid but we will not comment for the time being on the further steps and activities for meeting this obligation," NLB officials told Delo.

According to the report, the EC is insisting on the move due to the delay in the sale of 75% minus one share of the bank's capital. The sale was a crucial element of the viability assessment in the NLB state aid decision of December 2013, under which the Commission approved the granting of over 2 billion euro ($2.2 billion) of state aid to the bank.

In line with the originally proposed commitments, Slovenia was due to make the sell a stake in NLB before the end of 2017. However, in the spring of 2017, the government of prime minister Miro Cerar decided to suspend an announced initial public offering (IPO) in NLB shares on the London and Ljubljana stock exchanges due to price concerns.

In August 2018, the EC approved the the Slovenian government's new commitment package for NLB, this time pledging to complete the sale of 75% minus one share of the bank's capital by the end of 2019.

As a result, in November 2018, Slovenia sold 59.1% of NLB's issued share capital in an IPO on the Ljubljana Stock Exchange, while in June 2019, Slovenia’s sovereign holding company, SDH,  successfully concluded NLB's privatisation by completing the placement to institutional investors. This had left the government with 25% plus one share in NLB.

Back in 2013, the Slovenian government stepped in to recapitalise NLB and two other lenders - NKBM and Abanka, narrowly avoiding an international bailout. The same year, Slovenia committed to the European Commission to sell part of NLB within four years.

($=0.9019 euro)