December 15 (SeeNews) - Slovenian reinsurer Sava Re [LJE:POSR] said on Thursday it filed legal action against state-owned Nova Ljubljanska Banka and 'bad bank' DUTB, as sole successor of Factor banka, due to the cancellation of subordinated financial instruments issued by the two banks.
The cancellation was effected on December 18, 2013, due to emergency measures decreed by the Slovenia's central bank, Sava Re explained in a Ljubljana bourse filing.
In addition to Sava Re, claims have also been lodged by two Sava Re group members - by Zavarovalnica Sava against Nova Ljubljanska Banka, Nova KBM and DUTB as sole successor of Probanka; and by Moja nalozba against Nova Ljubljanska Banka.
"In doing so, the Sava Re group companies safeguarded their interests and the interests of their policyholders", Sava Re noted.
Slovenia's central bank instated a bank bail-in and a decision to wipe out holders of subordinated bonds in December 2013, with the intention to restore the conditions for long-term successful performance of the banks in question and avoid an international bailout. It is assumed that this move cost subordinate bond holders and small shareholders around 600 million euro ($625.1 million).
The total nominal value of all cancelled subordinated instruments owned by all Sava Re group members and funds under their management exceeds 35 million euro.