National tourism holding plans hit financial snag

Ljubljana – Plans for the creation of a national state-owned tourism holding appear to have hit a snag since epidemic-related outlays have crowded out budget funds needed for a key portion of the plan – the purchase of a 43% stake in tourism company Sava, Delo reports on Friday.

The paper received confirmation from the Finance Ministry that the budget for next year does not include funds – roughly EUR 40 million – needed to buy the Sava stake held by the private equity fund York.

Sava, which owns hotels and spas around the country, was a linchpin of Economy Minister Zdravko Počivalšek’s plan, in the making for several years, to pool together tourism assets and create a national holding that would have sufficient capital to undertake much needed investments.

According to Delo, York may now demand the execution of provisions of the Sava restructuring plan including the payment of outstanding liabilities to its shareholders.

Both York as well as the two state-owned shareholders of Sava, KAD and the Slovenian Sovereign Holding (SSH), are creditors with outstanding claims to Sava worth roughly EUR 60 million that are due by June 2021.

York is reportedly interested in cashing in its claims with the sale of tourism assets, while the state-owned shareholders are in favour of a debt-to-equity conversion.

Delo says the SSH supervisory board is likely to debate the current situation next week.

Adding to the uncertainty, the entire tourism sector was shut down, first in spring and now in autumn, which is likely to affect any valuation of the company.