Business News

Govt Gives Nod to KBC Proposal for Changes to NLB Agreement

Ljubljana, 02 December (STA) - The cabinet approved a proposal from Belgian banking group KBC for changes to the shareholder agreement with the state on managing the NLB bank. It is unclear what the changes are, but Finance Minister Franc Krizanic reiterated that both major shareholders were behind the bank as it seeks to raise EUR 250m in fresh capital.

The details of the proposed changes are not known and Krizanic was refused to provide further details after Thursday's cabinet session. However, he said he expected that KBC, which owns around 30% of NLB, would participate in the NLB capital injection approved by the shareholders last week.

"The two [major] owners stand behind this bank, support it. I think this is a good investment," Krizanic said in commenting on the decision. He added that negotiations on the implementation of the capital injection were ongoing.

The capital supply proposal was not endorsed by the KBC, which wanted the EUR 250m to be provided partly in cash (EUR 200m) and partly in hybrid instruments (EUR 50m) as part of a greater role of the bank's 2010-2015 strategy in restructuring.

Having been outvoted by the state at the 25 November shareholder meeting, the Belgian group said it was disappointed: "It is difficult for KBC to conclude whether the capital injection will bring the desired value in the absence of a clear reference to the bank's strategy."

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