The supervisors of Slovenia's biggest bank, NLB, confirmed on Thursday 27 October as the date for a shareholders' meeting that will discuss a planned EUR 250m capital increase at the state-owned bank. The capital increase, coming after after an almost entirely state-funded capital injection of equal size in March this year, was demanded by central bank Banka Slovenije to bolster the bank's capital adequacy.
It is expected to be accompanied by a restructuring plan that was demanded after the March rise by the European Commission. The plan was endorsed by the supervisory board today and is based on the bank's existing strategy for the period until 2015. In line with a government statement issued after NLB managed to narrowly pass the EU-wide stress test for banks published in July, private investors will be given priority status in the planned capital rise. Public funds will only be an option if private sources do not suffice and under strictly defined criteria.
According to Finance Minister Franc Krizanic, the government is conducting talks with several interested investors, which unofficially include the bank's second biggest owner, Belgian group KBC, as well as the EBRD, and the International Finance Corporation (IFC), which is part of the World Bank.
KBC is said to be interested in participating in this capital increase round in order to preserve a controlling stake.
The price of NLB shares for the increase is reportedly the key stumbling block in the talks. It stood at EUR 116 in the March increase, which is the price the government is also insisting on this time.
However, potential investors are pointing to the NLB's continued problems with write-downs and reservations and are said to be demanding guarantees the EUR 116 would also be the minimum price in case of their subsequent withdrawal.
Another alternative unofficially discussed is an initial public offering under market conditions, although the government is allegedly not happy about the prospect of a much lower share price that this would bring.
Given the complex situation, there is also talk of the possibility of the capital increase not being carried out this year but at the start of 2012.
Source: SLOVENIATIMES
