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Gorenje in for Major Overhaul, Secondary Listing Imminent

Ljubljana, 14 March (STA) - Household appliances maker Gorenje, one of the biggest Slovenian firms, plans to overhaul its corporate governance structure. A secondary listing is being mulled and the company is not ruling out relocating abroad to escape Slovenia's uncompetitive business environment, according to CEO Franjo Bobinac.

"I would not like to prejudge anything; no subject is taboo and no solution is impossible," Bobinac told Monday's edition of business daily Finance when asked whether relocation abroad was an option in the company's drive to improve profitability.

"All the changes that we decide for will enable Gorenje to develop. Most core competencies will definitely stay in Slovenia," the Gorenje boss said.

One of the options Bobinac mentioned is hiring engineers abroad, for example in Serbia, since employing highly skilled staff in Slovenia is simply too expensive.

"This does not mean relocation of Slovenian engineers or development from Slovenia. However, Gorenje already has competence centres in the Netherlands and Sweden, and R&D departments in the Czech Republic and Serbia."

Gorenje also plans a secondary listing, with Bobinac saying that the company cannot be "held hostage by the Slovenian financial market".

"We have to think quickly and seriously about potential scenarios. The situation on the Ljubljana Stock exchange is forcing us to."

As Bobinac noted, "the Slovenian market lacks liquidity and you can affect price with a few thousand euros."

Bobinac said the company may also issue a bond this year to refinance short-term loans of about EUR 225m.

Gorenje returned to profit last year, posting a group net profit of EUR 20m for 2010 compared to a loss of EUR 12.2m the year before.

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