LJUBLJANA (Slovenia), February 21 (SeeNews) – Italy's TCH Cogeme, a unit of investment firm Palladio Holding Group, has suspended a deal for the purchase of 92% Slovenia's ailing car parts maker Cimos Group, Slovenian investment company Alta Invest said on Tuesday.
The Italian buyer withdrew from the deal following a disagreement between Cimos and the Croatian Agency for Deposit Insurance and Bank Resolution (DAB), towards which the company has an unpaid debt, Alta Invest, the company representing TCH Cogeme, told SeeNews in a statement.
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Some 15 years ago, Cimos took out a loan from Rijecka banka - a Croatian lender which later ceased to exist and its claims were taken over by DAB. The Croatian government recently said it has approved a deal under which Slovenia will pay 7 million euro ($7.4 million) to settle, out of court, the dispute over the outstanding debt.
But new disagreements between the two parties have now forced TCH Cogeme to pull out of the deal concluded in October last year.
"The purchase agreement was concluded on the expectation that by December 31, 2016, certain conditions would be met. Among these suspensive conditions, the success of the agreement between Cimos and DAB was key", Alta explained.
When the conflict was not resolved by the end of 2016, TCH Cogeme agreed to extend the deadline until the end of January. "Because, to this day, the dispute between Cimos and DAB is not resolved, TCH Cogeme is withdrawing from the transaction", Alta noted.
Privatisation is the last step in a long process towards Cimos' stabilisation, Slovenia's 'bad bank', DUTB, said earlier. Cimos, which employs some 4,000 workers in Slovenia, Croatia, Bosnia and Serbia, is now most likely headed towards bankruptcy.
The Koper-headquartered group manufactures mainly turbo compressor and turbine housings, power train components, chassis and car-body parts. Cimos has a production footprint in four countries across Southeast Europe.
($=0.946529 euro)