Financial firm Alta Skupina, which acted as adviser to the potential buyer, wrote on behalf of the Italians that it had already been announced on 20 February that the legal documents signed with the consortium of sellers were no longer valid because the conditions were not met.

"The decision of TCH Cogeme to withdraw from the planned transaction due to this has already been forwarded to the consortium of sellers," the press release says.

Representatives of the Slovenian Economy Ministry and the sellers - the Slovenian bad bank (BAMC) and the Slovenian Sovereign Holding (SSH) - claimed last week that talks were still ongoing even though the Italians had said they were withdrawing.

The key suspensive condition in the privatisation of the struggling company was an agreement on Cimos's debt to DAB, the Croatian agency for bank resolution.

An agreement on the repayment of the debt was reached at the end of January by Slovenia's economy minister and Croatia's minister for state assets, but the deal was not fine-tuned until last week as the Croatian government wanted additional guarantees regarding Cimos's 1,000-plus jobs in Croatia.

Slovenia moreover wished that the Italian fund execute the transaction before the debt deal with Croatia is wrapped up.

Today's announcement indicates the deal, in line with which the Slovenian bad bank would pay EUR 7m for the car industry supplier's debt, will also be called off.

Cimos's Croatian debt stems from a claim dating from the 1990s when Cimos took out a EUR 20m loan from Riječka banka. After the bank went bankrupt, the claim was taken over by DAB.

Siol.net has meanwhile reported about another open issue with Cimos, which has a workforce just over 4,000.

According to the news portal, the Croatian State Attorney's Office has been undermining the registration of Cimos's pieces of real estate in Croatia's Buzet and Roč, whose value has been estimated at EUR 40m.

The chance of losing the case poses a great risk for the company and thereby for the potential new owner, Siol.net reports.