NKBM bank and flag carrier Adria Airways get new owners

SSH concluded two major sales in 2016, the April sale of NKBM to US private equity fund Apollo and the European Bank for Reconstruction and Development (EBRD) and the March sale of Slovenia's flag carrier Adria Airways to German fund 4K Invest.

The custodian of state assets sold NKBM for EUR 250m, but criticism that the price was to low due to EUR 870m recapitalisation in late 2013 can still be heard.

The state meanwhile had to inject EUR 3.1m of fresh capital in Adria before SSH, the Bank Asset Management Company (BAMC) and the state could share a symbolic sum of EUR 100,000 they got for the flag carrier.

The public was no happier with the sale of Adria than it was with the sale of NKBM, because the new owner continues to restructure the company. Jobs have been lost, the 13 planes Adria uses are no longer in its ownership and pundits keep speculating whether the flag carrier will even survive.

Apart from these two major sales, SSH earned has EUR 951,000 over the year by selling off minor investments.

Sales of Paloma and Cimos nearing end

SSH also came under fire with regards to the recapitalisation of tissue maker Paloma and the sale of car parts supplier Cimos.

In July, the shareholders of tissue maker Paloma endorsed a EUR 18.2m recapitalisation through which a 57% stake in the company will pass into the ownership of Slovak financial fund Eco Invest.

The recapitalisation is to be completed in the coming days and a takeover bid is expected soon aftert. The Slovak fund would then need to provide another EUR 13.6m to complete the acquisition at EUR 4.01 per share.

Before endorsing the takeover by the Slovak fund, the shareholders, including SSH, which managed the 71% state-held stake in Paloma, endorsed in January a EUR 15m capital injection by the Polish equity fund Abris Capital.

The latter withdrew from the procedure due to delays caused after the initial pick for the recapitalisation was challenged in court by minority shareholders.

Raising a lot of dust in the public was also the sale of a 92% stake in Cimos to Italian investment fund Palladio Finanziaria in a deal worth EUR 110m. The transaction is to be completed in the first quarter of 2017 pending regulatory approval, bad bank BAMC, which led the sales, said in October.

The Italian owners announced a EUR 20m capital injection and further development of the company that is to become the core company of automotive operations of the Palladio Holding group.

Sale of NLB put on hold

The sale of Slovenia's largest bank was announced a priority by SSH in its 2016 plans because the state has to sell NLB by the end of next year under a deal with the European Commission that paved the way for the 2013 EUR 1.55bn recapitalisation.

While preparations for the sale through an IPO went under way in the spring and a contract was signed with Deutsche Bank to advise on the sale, SSH decided in September to postpone the IPO until next spring due to developments at the international level as well as certain risks with regards to NLB's court proceedings.

SSH said it would continue with the sale of the bank "in compliance with the commitments given to the Commission", while the government is trying to get Brussels to think about potentially delaying the sale if risks prove too big.

An overhaul of the state assets management strategy has also been put on hold due to what some experts say is the heated, potentially even pre-election atmosphere in the country.

The government has decided to discuss the overhaul in the second half of 2017, which means that the strategy will likely not be drafted by the end of the government's term in late 2018.

SSH buying assets, fails to save Polzela

In the summer, SSH bought claims to tourism holding Sava from BAMC for EUR 68m, following which SSH, the state-run fund KAD and Luxembourg-based fund York decided on a court-mandated debt restructuring and a debt-to-equity conversion.

SSH and KAD became the owners of a 45.13% stake in Sava, while York holds 41.74% in the company. The long-term goal is to consolidate the ownership in tourism and then sell it off to strategic owners.

The custodian of state assets also tried to rescue stockings maker Polzela through a EUR 2.1m injection and debt-to-equity conversion that made SSH the only owner, but was unsuccessful.

Following a failed search for a strategic investor and a scandal with CEO Marko Klemenčič, who had paid himself 40% higher pay than the figure set in his contract, the state appointed Metka Hrovat the CEO.

After a report on the financial restructuring of the struggling company showed that it was insolvent as of 30 November, Hrovat filed for receivership earlier this month.

SSH chairman Jazbec resigns over Luka Koper row

The custodian of state assets also underwent a staffing shake-up in the summer, following a row over a planned replacement of three supervisors, including chief supervisor Alenka Žnidaršič Kranjc, at the annual shareholder meeting of port operator Luka Koper at the beginning of July.

Marko Jazbec announced his decision to step down just before the meeting, at which the proposal for replacements was removed from the agenda. He was the first victim of a month-long stand-off over the appointment of new supervisors at Luka Koper that triggered a revolt by workers and the local community.

SSH supervisor Lidia Glavina was appointed acting SSH boss following Jazbec's resignation taking over on 15 July. She also applied for the full-fledged chairmanship of SSH.