Begunje na Gorenjskem, 16 April (STA) - The long-awaited privatization of ailing sports goods maker Elan has failed after London-based buyout fund Argus Capital revoked its offer. Despite the setback, the privatization process will continue, the Elan supervisory board said on Tuesday.
The sale of Elan, which is in majority ownership of the state-owned PDP firm, had been ongoing for two years.
Argus Capital was reportedly interested in buying the company for less than a million euros and recapitalising it with EUR 15m.
The company recently signed a non-disclosure agreement but after a renewed inspection of Elan's balances it decided against the acquisition.
Business daily Finance reports that Elan's performance fell short of expectations, but Elan told the STA the operations were in line with expectations.
Based on preliminary Q1 results and the current state of the order book, a positive operating income is expected, the company said.
Elan's bottom line had reportedly been undermined in particular by its snowboarding division in Austria, but that company filed for bankruptcy in March.
Excluding the Austrian subsidiary, the company would have been profitable in 2012.
The decision by Argus Capital puts Elan in an uncomfortable position, as the fresh capital was to be used to pay back EUR 10m state aid ruled as illegal by the EU.
Elan itself had been emphasising that privatisation plus recapitalisation were urgent.
However, board member Leon Korošec said at the end of last year that the company could take out a long-term loan in the event the recapitalisation is not completed in time.