The Slovenia Times

Economy Overview



Management reshuffle at Gorenje

In June, the supervisory board of the household appliances maker, Gorenje, appointed a new management board under incumbent CEO Franjo Bobinac, just hours before the shareholders appointed new supervisors. Apart from Bobinac, incumbents Žiga Debeljak and workers' representative Drago Bahun are being joined by Stanka Pejanović, Tomaž Korošec and Saša Marković. Their five-year terms will start on 20 July, with the exception of Marković who was appointed as of 1 September.

Bobinac, who had been reappointed as chairman in July 2017, referred to the ongoing takeover by the Chinese group, Hisense, saying that the company "is getting a team that has the know how and can make use of all of the advantages that the strategic partner brings to the group". He praised Bahun's "delicate sense for social dialogue and balance between various stakeholders within the Gorenje group", and Debeljak for "very good financial management" and for having laid down a "comprehensive approach to digitisation". Digitisation would remain Gorenje's priority, especially in light of the development of smart and connectible appliances.

Meanwhile, shareholders appointed Bachtiar Djalil, Corinna Claudia Graf, Miha Košak and Bernard Charles Pasquier to the supervisory board. According to the Small Shareholders' Association, the supervisors committed to resigning as soon as Chinese Hisense, which already holds 60% of the company, completes the takeover. Business newspaper, Finance, reported that Hisense abstained from voting for "legal reasons", noting that the takeover bid at EUR 12 per share will expire on 26 June. The new supervisory board, to serve until July 2022, will consist of four shareholder representatives, three staff representatives, while three seats on the board were left empty for the new owner to fill.



Franjo Bobinac, CEO and Chairman of the Management Board of Gorenje (Photo: Lili Pušnik/STA)


Mercator shareholders appoint three new supervisors

In June, the shareholders of retailer Mercator appointed Fabris Peruško, Irena Weber and Sergei Volk as new supervisors after their predecessors resigned earlier this year. They also reappointed Matej Lahovnik and Ivica Mudrinić, whose terms on the supervisory board expire in August. The three new supervisors of Mercator, owned by troubled Croatian conglomerate Agrokor, replace Ante Ramljak, formerly Croatia's Agrokor special trustee, and former Agrokor advisors, Teo Vujčić and Damir Kuštrak.

The group around the retailer recorded a EUR 184m net loss in 2017, largely due to real estate impairments resulting from a new accounting policy and amounting to EUR 145.8m. Adjusting for the negative effect of one-off events, the group would have made a EUR 6m profit. Mercator has nevertheless been assessed as the most valuable company within the Agrokor group. It is valued at EUR 878.6m, while the combined value of all of Agorkor subsidiaries is almost EUR 3.5bn.

The crisis management of Agrokor expects that it will conclude a settlement contract with the creditors, which hold a total of EUR 5.6bn in claims to Agrokor, by 10 July. According to unofficial information, the Russian banks, Sberbank and VTB, are to get around a 46.5% stake in Agrokor. Sberbank has an 18% stake in Mercator and one of the possibilities is that the bank sells its stake to Agrokor as part of the settlement.


Photo: Nebojša Tejić/STA


Banks urged to prepare for bad times

Ljubljana, June - Despite the favourable general economic situation, upbeat forecasts and a revival in lending, the Slovenian banking regulator has advised banks to start preparing for a potential new crisis.
"Preparations for a less favourable turn of events should start in the good times," Primož Dolenc, the interim Governor of the Slovenian Central Bank, told an annual bankers' conference in Ljubljana. Dolenc assessed the state of the Slovenian banking system as favourable; the banks continue to have a strong capital base, despite a slight decrease in their capital adequacy ratio in 2017.

The pressure on capital adequacy is blamed on a spike in lending. This has been quite high this year and last, a development reflected in the fact that the fall in interest revenue has bottomed out. It is mainly longer-term and unsecured retail loans which are increasing; these are granted swiftly without in-depth checks as to the borrowers' creditworthiness.

"Average maturity of new, long-term retail loans was almost seven years, last year. This is a length of time that may see a turn in the economic cycle and a deterioration in the debtors' creditworthiness." Dolenc added that a much slower growth in housing loans suggested that such lending would not fuel the growth of real estate prices further. Banka Slovenije is closely monitoring these price trends because it would not want a potential drop in real estate prices to again cause troubles for bank balance sheets. Corporate credit from domestic banks has also been increasing, however companies have improved their creditworthiness and rely more on their own funds.



Banka Slovenije Interim Governor, Primož Dolenc (Photo: Tamino Petelinšek/STA)



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