German advisor firm EquityGate from Wiesbaden has been retained to manage the sales procedure, Sava announced in a press release.

Gorenjska banka has a market share by assets of about 4%. It posted heavy losses in 2013 but has since bounced back, reporting a net profit of EUR 2m for 2014.

The bank narrowly escaped a bailout last year. Stress tests in late 2013 determined it had a potential capital shortfall of EUR 328m, but it managed to shore up its capital base without state aid.

Sava is by far the biggest single shareholder of Gorenjska banka. All other shareholders - the majority are banks and major domestic companies - have stakes below 5%.

The Gorenjska banka disposal is just the latest consequence of the recent seizure of Sava's tourism division, Sava Turizem, by the Bank Asset Management Company (BAMC).

The bad bank's move has been temporarily stopped by a court, but it nevertheless led to the end of bankruptcy protection and the launch of court-mandated debt restructuring.

Sava had outstanding financial debt of over EUR 222m as at the end of last year. BAMC is by far its biggest creditor with claims worth EUR 86.2m.