June 9 (SeeNews) - Slovenian state holding company SDH said on Friday it cannot continue to pursue activities towards an initial public offering and listing of Nova Ljubljanska Banka's (NLB) ordinary shares on the Ljubljana Stock Exchange and its global depositary receiptson the London Stock Exchange.
Following the refusal of the government to approve the minimum offer price and the offer price range for NLB shares, the procedure for the sale of the country's largest bank via an IPO has been cancelled, SDH said in a statement.
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Acting as the assembly of sovereign holding company SDH, the government decided to reject the minimum offer price of 55 euro ($61.4) per NLB share and the offer price range of between 55 and 71 euro per share, the cabinet said in a statement late on Thursday.
Last month, SDH said it would sell NLB in two parts by the end of 2018.
The government has also concluded that the issue of the transferred foreign currency deposits in Croatia represents an objective external circumstance which, given other risks arising in the sale process, will prevent the completion of a successful sale.
Namely, NLB had been taken to court in Croatia over Yugoslav-era deposits that had been repaid to the bank's former customers in Croatia by local banks, which then decided to seek compensation in court.
The government said it has now tasked finance minister, Mateja Vranicar Erman, to notify the European Commission and to examine, with the stakeholders, the possibilities of alternative compensation measures, it noted.
In May, it said it plans to sell a 50% stake by the end of the year, and a further 25% by the end of 2018, for which it was later granted permission by the Commission.
NLB showed a minor capital shortfall under the adverse scenario of the stress test conducted by the European Central Bank in October 2014.
NLB has been 100% state-owned since 2013, when the Slovenian government stepped in to recapitalise it and two other lenders - NKBM and Abanka, narrowly avoiding an international bailout. The same year, Slovenia committed to the European Commission to sell part of NLB within four years.
($=0.893629 euro)