Business News

Deal to Rescue Cimos Initialled

Ljubljana, 26 April (STA) - Representatives of Cimos, its owners, banks and the government initialled late on Thursday an agreement on the restructuring of the troubled car parts maker. No details were revealed about what the government described as a first step that needs to be upgraded with an agreement backed by the relevant bodies of all stakeholders.

The deal comes after the government decided on 18 April it would actively support the efforts of Cimos, its owners and creditors to rescue and restructure one of Slovenia's biggest exporters, including with a state guarantee for EUR 35m in bank loans to the company.

Economic Development and Technology Minister Stanko Stepišnik said then that the state would guarantee for this amount in liquidity loans provided by banks for up to six months, after which a long-term solution for Cimos will need to be found, either in form of a capital increase or capital-to-stock conversion.

The agreement was initialled on behalf of the state by Stepišnik, who reiterated that saving over-leveraged but promising companies was one the government's priorities.

"By initialling the agreement all stakeholders demonstrated readiness to contribute to saving Cimos, which has been recognised by all as a promising company in the European car industry. The saving of Cimos can be seen as an example of good practice," Stepišnik said.

Koper-based Cimos, which employs about 7,000 workers, 3,000 in Slovenia, finished 2012 with a EUR 25m loss and reportedly has debts of around EUR 400m.

It managed to negotiate a debt restructuring deal with banks in November last year, but a planned EUR 22m recapitalisation failed as all the shareholders did not come on board.

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