Ljubljana related

26 Nov 2018, 11:45 AM

STA, 24 November 2018 - The state budget generated almost one billion euro in revenue from the privatisation of state assets in the last six years, with the recent sale of a 65% stake in the NLB bank actually representing the bulk of it. Among the most profitable years were also 2014 and 2016, when the state sold some major investments.

With the share of the country's largest bank sold at EUR 51.50 at the recent IPO, the state received the proceeds amounting to EUR 609m.

Funds raised used to reduce debt and grow a demographic fund to pay for pension system

"The proceeds from the sale of the capital investment in NLB have been transferred to the budget and used for repayment of debt in accordance with the public finance act," the Finance Ministry has told the STA.

More than EUR 540m or 90% of the proceeds have been earmarked for debt repayment, and the remaining 10% have been transferred onto a special account of the ministry.

The money will be reserved for the planned independent demographic fund, which is a response to the demographic changes and which looks to ensure long-term stability of the pension system.

The special account for the demographic fund has been holding ten percent of the proceeds from all privatisation deals since April 2014, when the law on Slovenian Sovereign Holding (SSH), the custodian of state assets, entered into force.

A total of EUR 97m has been collected on the account so far.

Since 2013, when the National Assembly confirmed a list of 15 companies for privatisation, the national budget has received a total of EUR 983.7m in proceeds.

Before the SSH law entered into force, all proceeds were spent for repayment of debt, which stood at EUR 31.8bn at the end of last year.

Due to the economic growth Slovenia has been recording in the recent years, its share in the country's GDP has been decreasing, standing at 74.1% at the end of last year.

The recent history of privatisation in Slovenia

The first companies to be privatised were coatings maker Helios in October 2013 and medical laser maker Fotona in January 2014, followed by car electronics maker Letrika and Ljubljana airport operator Aerodrom Ljubljana.

Proceeds from the privatisations completed in 2014 amounted to EUR 119m.

In mid-2015, the state-owned owners of sports equipment maker Elan sold the company for a symbolic sum, with the new owners, Bank of America Merrill Lynch and Wiltan Enterprises, securing EUR 12m as a return of state aid received in 2008.

Aircraft maintenance company Adria Airways Tehnika was also sold in 2015 to the Polish Linetech Holding for around EUR 1m.

In the same year, the US investment fund Apollo and the European Bank for Reconstruction and Development bought NKBM, the second-largest bank in the country, for EUR 250m, while bread and pasta maker Žito was acquired by Croatia's Podravka.

The privatised companies from the list also include car parts maker Cimos, tissue maker Paloma, and airline Adria Airways.

All our stories on privatisation in Slovenia are here

14 Nov 2018, 17:31 PM

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.

09 Nov 2018, 19:55 PM

STA, 9 November 2018 - Slovenia's largest bank, NLB, fetched EUR 51.50 per share in the initial public offering, the bottom of the offering price range. The state will initially sell 59.1% of the bank for just below EUR 609m, but taking into account an over-allotment option that stake could increase to 65%.

Based on the pricing, the market capitalisation of NLB will be approximately EUR 1.03bn at the start of trading on the Ljubljana Stock Exchange and the Main Market of the London Stock Exchange on 14 November, a release from the bank and Slovenian Sovereign Holding (SSH) said.

The book value of the share capital at the end of June was EUR 1.51bn and the final offering price represents 68% of the share's book value. The SSH set the IPO offering price at EUR 51.50 and EUR 66 per share. The offering price in the aborted IPO last year was set at EUR 55-71.

The release says that the seller is making an additional 1,18 million NLB shares available pursuant to the over-allotment option which, if exercised in full, would increase the offer size to EUR 669.5m, representing 65% of the share capital on admission.

A stabilisation mechanism, the option is said to have been made available on the demand of large international investors. Stabilisation managers Citigroup and WOOD & Company will retain a portion of the shares to close deals within 30 days from listing in order to stabilise the price.

The shares are to be floated on the Ljubljana and London stock markets on 14 November when the settlement of shares is to take place. Investors have time to pay for their shares by then.

According to the pricing notification issued on NLB's website, the biggest single institutional buyers of shares are US financial fund Brandes Investment Partners (7.6%) and the EBRD (6.3%).

Since information on the buyers of shares in London are not public, detailed data on the dispersed structure of foreign owners will not be available when details are to be presented on 14 November.

Unofficially, the demand considerably outstripped what SSH was willing to accept in a bid to avoid the most predatory investors while forming a buffer if anything was to go wrong.

"We are very proud of having completed the offering of NLB's shares. Today's announcement represents a significant milestone in the privatisation process and in fulfilling our commitments to the European Commission," SSH chairman Lidia Glavina was quoted as saying in the release.

NLB chairman Blaž Brodnjak hailed the pricing as "another important milestone in the process of privatization". "We are looking forward to opportunities and challenges that the listing on the stock exchange will bring to the bank."

The government committed to sell the bank in exchange for the European Commission's approving a EUR 1.56bn state aid for the bank in late 2013.

While the state is to keep a controlling stake of 25% plus one share, it committed to sell at least 50% this year and any outstanding share of up to 75% minus one share by the end of next year.

Until the sale commitment is met in full, the bank will need to implement at least part of compensatory measures, including closing down offices in Slovenia, with 14 slated for closure in early December.

Moreover, since the state 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.

In addition, NLB will be able to approve new loans only if receives the minimum yield from equity instruments. NLB cannot do leasing business or make acquisitions either.

The bulk of shares in the IPO was offered to institutional investors. Retail investors were able to subscribe at least 10 shares at EUR 66 apiece. Unofficially they paid in some EUR 30m. The overpaid amount will be returned by 15 November.

The shares were also bought by members of the NLB supervisory and management boards. NLB chairman Blaž Brodnjak acquired 1,136 shares and the head of the supervisory board Primož Karpe 606 shares.

NLB paid out a total of EUR 378.2m in dividends to the state in the past three years. The state aid in 2013 amounted to EUR 1.56bn.

29 Oct 2018, 10:20 AM

STA, 29 October 2018 - Shares of NLB, Slovenia's largest bank, will be priced at EUR 51.50-66 in the forthcoming initial public offering of up to 75% of the bank minus one share, valuing the entire bank at EUR 1-1.3bn. The pricing, revealed in a prospectus released on Friday, is at the lower end of expectations but reflects the current market situation. 

24 Oct 2018, 13:00 PM

STA, 23 October 2018 - The supervisory board of Slovenian Sovereign Holding (SSH) endorsed on Tuesday all documents required for the initial public offering of NLB bank, allowing privatisation of Slovenia's largest bank to proceed. The price range will be revealed by the end of the week, presumably on Friday, when the prospectus is published. 

18 Aug 2018, 09:23 AM

STA, 17 August 2018 - Lynda Blanchard, the nominee for the new US Ambassador to Slovenia, described Slovenia in a hearing before the Senate Foreign Relations Committee in Washington on Friday as "a reliable partner of the US" and a "regional leader in implementing democratic reforms" in the Balkan region. She pledged to encourage the continuation of privatisation. 

06 Jan 2018, 09:25 AM

But managers say their results warrant the increase. 

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