BAMC, the bad bank, which became Cimos's biggest owner with the transfer of bad loans, told the STA on Monday that the debt to equity conversion will give the creditors a majority stake and allow Cimos to use previous debt collateral to acquire fresh funds.

The creditors of the Cimos group, which employs 7,000 people and is under threat of receivership, decided for the plan to allow it to survive and operate successfully, since its present situation is also the result of flawed corporate management in the past, BAMC added, calling for an effort by all stakeholders.

TV Slovenija reported recently that Cimos, one of the few companies that boast revenue growth in what is a troubled period for the car industry, allegedly had work secured for the coming seven years, but that it recorded a loss of more than EUR 130m last year.

Business daily Finance moreover reported that the group's outstanding financial debt is about EUR 400m, while the debt restructuring talks with Slovenian creditors affect about EUR 350m. According to plans obtained by Finance at the beginning of March, around EUR 180m were to be converted into equity.

Cimos received a state guarantee worth EUR 35m in mid-2013 in an effort to save thousands of jobs in Slovenia.

As one of the biggest companies whose non-performing loans have been transferred to BAMC, the Koper-based group is also seen as a test case of corporate deleveraging, which the government has made a priority after the state-owned banks were bailed out.