March 27 (SeeNews) - Slovenian holding company Istrabenz plans to propose to its shareholders a capital hike to convert debt into shares as part of an agreement with the country's ‘bad bank’, the Bank Assets Management Company (DUTB), it said.
The transaction was envisaged in an agreement signed on March 25 with Slovenia's ‘bad bank’, the Bank Assets Management Company (DUTB), to extend the maturities of the debt of Istrabenz, the holding company said in a filing with the Ljubljana Stock Exchange on Tuesday.
You can subscribe to our M&A newsletter here
According to Slovenian media reports, the capital hike and its subsequent exchange for debt would allow DUTB to become a majority shareholder in Istrabenz, in line with the strategy of Slovenia's government to acquire ownership of the spa tourism sector in the country.
DUTB is the largest creditor of Istrabenz with liabilities of about 109 million euro ($122.8 million) and 90% of its claims are guaranteed with shares of Istrabenz Turizem, a subsidiary owning six hotels.
Last month, the DUTB general assembly approved the seizure of Istrabenz Turizem's shares. Back then, daily Dnevnik quoted Eva Stravs Podlogar, a state secretary at the economy ministry, as saying that the decision is in line with the strategy of the Slovenian government to increase ownership in spa tourism companies.
However, as the acquisition of Istrabenz Turizem would cause the bankruptcy of Istrabenz and DUTB would have to assume the other liabilities of the subsidiary, it decided to reach a deal for the conversion of debt into capital of its parent company, daily Dnevnik said on Tuesday.
DUTB held a 5% stake in the capital of Istrabenz at the end of September 2018, according to data from the financial report of the company for the first nine months of last year. The largest shareholder in Istrabenz at the end of September was Slovenian business group Sava with a 16.32% stake.
($ = 0.8876 euro)