STA, 14 November 2018 - NLB shares were listed on the Ljubljana and London stock exchanges on Wednesday, bringing the sale of 65% of Slovenia's leading bank via an initial public offering (IPO) to an end. By selling NLB, Slovenia has partly met its commitment to the European Commission to sell 75% minus one share in exchange for a bailout in late 2013.
As the state has retained a controlling 35% stake, US financial fund Brandes Investment Partners (7.6%) and the EBRD (6.3%) have emerged as the two largest private owners.
The state has sold almost 12 million shares or 59.1% of all shares of NLB at €51.50 per share to get almost €609m, but taking into account an over-allotment option the stake could increase to 65% (€669.5m).
The seller is making an additional 1.18 million NLB shares available pursuant to the over-allotment option. The shares will be kept on a separate fiduciary account and be made available 30 days after the listing to make deals to stabilise the price.
"We remain a Slovenian banking group," NLB chairman Blaž Brodnjak said at today's listing on the Ljubljana Stock Exchange (LJSE), which was accompanied by symbolic bell-ringing when trading opened in Ljubljana at 9:15 AM.
The bank's shares have also been listed in the form of financial instruments known as GDR on the London Stock Exchange. NLB has become the first Slovenian joint-stock company to be listed in London.
"The head and heart of NLB remain in Ljubljana," said Brodnjak, adding that a new era was beginning for the bank, as "we have been very limited in our operations for five years", referring to the restrictive measures set down by the Commission.
Under the commitment to the EU, Slovenia has to sell another 10% of NLB by the end of 2019. Until then, the bank will be subject to a set of measures the Commission has imposed to make sure NLB is not in a more favourable market position than its competitors.
Once all limitations are lifted, it will be a "great privilege and great responsibility" for the bank, Brodnjak assessed, labelling today's listing as "the most important day in the bank's history".
Until the end of 2019, the bank is banned from making acquisitions, having aggressive advertising campaigns and performing leasing services.
Moreover, since the stake sold this year will be less than 75% minus one share, the bank will also have to start procedures to sell NLB Vita, its insurance subsidiary.
Brodnjak however hopes that it will be possible to negotiate with the European Commission the elimination of the remaining limitations and requirements. He noted that European Commissioner for Competition Margrethe Vestager will pay a visit to Ljubljana soon.
He believes that under a majority private ownership, the bank will develop in the sense of corporate management and freedom of operation. The bank is in a very good shape and is a systemically important institution in another five countries.
The group is also present in Serbia, Montenegro, Bosnia-Herzegovina, Kosovo and Macedonia, and the bank will now be vying for the "title of a regional champion", for which it has potential as it is familiar with the history and culture of the region.
Finance Ministry State Secretary Metod Dragonja said that with the transaction, Slovenia had met the first, most important commitment to the European Commission.
"Slovenia has clearly shown that it respects the commitments given. The credibility that the state has gained by doing so will make a positive impact on the state's and bank's credit ratings," he added.
Lidija Glavina, the chairwoman of Slovenian Sovereign Holding (SSH), said that SSH would continue with the sale of the remaining shares by the end of 2019.
"Despite the very demanding situation on financial markets, internationally renowned financial investors have decided to buy," she said, adding that NLB nevertheless remained "an independent Slovenian financial institution".
SSH will be able to sell the remaining stake after a six-month moratorium. There will be no price range and procedures will be simplified. "We will be waiting to get the maximum out of it," Glavina announced.
LJSE chairman Aleš Ipavec added that it was "an important day for the Slovenian capital market", while he did not wish to comment on the price of the share.
"Some are not satisfied as it is allegedly too low. But the market will show soon how much the share is really worth," he added.
The listing ceremony was also attended by representatives of regulators, the financial sector and some companies, mostly those traded in the prime market.
Slightly more than €500,000 in turnover with the NLB shares has been generated so far, with the price standing around €55, which is €4.50 above the price fetched with the IPO.
NLB closed the day’s trading at €56.65, 5.15 above the IPO price.