Business News

Deadline for Recapitalisation of Abanka Extended

Ljubljana, 30 July (STA) - Banka Slovenije has extended the deadline for the recapitalisation of Abanka Vipa, Slovenia's third largest bank, until 31 December, the reason being steps related to the planned transfer of bad claims onto the bad bank.

The deadline for the recapitalisation demanded by the regulator would expire on Wednesday. But the extension had been expected considering the many issues still open concerning the transfer of toxic loans and the preceding independent bank asset quality assessment.

In accordance with the resolution of the shareholders' meeting of 8 April, Abanka Vipa is seeking to increase its share capital by EUR 90m through a new share issue at the price of no less than a euro per share, and by excluding the pre-emptive of existing shareholders.

Wishing to attract external investors to subscribe to new shares in Slovenia and abroad, Abanka hired Houlihan Lokey (Europe) Limited and Alta Skupina as bookrunning managers in the recapitalisation process, the bank announced in a press release posted on the website of the Ljubljana Stock Exchange.

Considering the discussions with the two bookrunners and prospective investors, the bank has identified their interest in the implementation of further steps in the recapitalisation process.

Several prospective investors have signed a confidentiality agreement with Abanka, have received information memorandum and have the option to submit non-binding bids, while talks are also under way with further investors who have expressed interest in signing a confidentiality agreement.

The discussions so far have shown that one of the key questions raised by prospective investors is related to the effects the transfer of the bank's non-performing claims on the Bank Asset Management Corporation (BAMC) would have on the bank's operations.

Abanka submitted an initiative for the implementation of measures under the bank stability enhancement act to the Finance Ministry on 11 July, and the government established on 18 July that the bank met conditions for the transfer of non-performing loans onto BAMC.

But before the operation, the bank needs to undergo an independent asset quality review and a stress test. Since the implementation of due diligence would importantly affect the planned timetable of activities related to the increase in share capital, Abanka asked the central bank for an extension of the deadline.

Banka Slovenije did so today, extending the deadline by 31 December, while ordering the bank to bring its Tier 1 capital ratio to at least 9.5% and the capital adequacy ratio to at least 11.8%.

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