Agreement reached on Cimos debt in Croatia
The Bank Assets Management Company (BAMC) will purchase the Cimos debt from DAB, the Croatian agency for bank resolution, giving the buyer of a 92% stake in Cimos, Italian investment fund Palladio Finanziaria, a clean slate, Economy Minister Zdravko Počivalšek said.
This solution will free Cimos of any costs associated with the debt, Zdravko Počivalšek told the press after reaching the agreement with his Croatian counterpart Goran Marić.
At what price BAMC will purchase the debt, which has ballooned from EUR 20m when it was incurred in the 1990s to EUR 57m, has not been revealed.
"We agreed that each side would shoulder its own legal fees and that the Croatian side will stop the court procedure. I believe the governments have done everything to rescue Cimos," Počivalšek said.
Marić said he was pleased the story had been wrapped up after twenty years. "I hope we will sustainably take care of production and employees in Slovenia and Croatia," he said.
Cimos, which earlier today called on the governments to reach an agreement, has not yet commented on the deal. Cimos workers, meanwhile, greeted the deal, albeit with an eye on tomorrow.
It remains to be seen what the exact content of the agreement is and how Palladio Finanziaria will react. "We are hoping for the best," Cimos works council president Trajko Isoski told the STA.
DAB was suing Cimos in Croatian courts and the potential liabilities dissuaded the Italian buyer, which had reportedly been willing to walk away from the deal.
It remains to be seen whether Palladio Finanziaria will accept the agreement.
The solution comes just a day before the deadline for the realisation of suspensive conditions set in the sales agreement signed with Palladio Finanziaria in October 2016.
Despite delays, it had been expected that a deal would be reached given that over 4,000 jobs are at stake in Cimos, over a quarter of that in subsidiaries in Croatia.
The company is in good shape after several years of restructuring and deleveraging but media reports suggest partners were only willing to commission new contracts once its ownership situation is sustainably resolved.