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Govt Approves EUR 35m Loan Guarantee for Cimos

Ljubljana, 18 April (STA) - The government approved on Thursday a state guarantee for a EUR 35m bank loan for car parts maker Cimos. According to Economic Development and Technology Minister Stanko Stepišnik, this is the first step in solving the financial straits of Slovenia's biggest exporter, which should be followed by a more lasting solution.

The state will guarantee for EUR 35m 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 minister explained.

The company needs long-term financial restructuring, Stepišnik said, adding that this was first the task of the owners and then banks, while the state may provide some help as the last resort.

The government signed off on the measure at today's session and has already sent it to the European Commission for approval.

According to Stepišnik, the aid model used now for Cimos could also be applied for rescuing other promising but troubled companies that are making headway in restructuring as part of their efforts to overcome financial difficulties.

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