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Lasko Challenges CPO Ruling, State Fund Proposing Capital Injection

Lasko/Ljubljana, 28 April (STA) - Pivovarna Lasko has filed a lawsuit at the Supreme Court with which it is challenging Tuesday's decision of the Competition Protection Office (CPO) to ban the troubled beverage group from disposing its shares in retailer Mercator. The state-run KAD has meanwhile proposed a capital increase as the solution for Lasko.

Lasko announced on Thursday it wants the court to initially stay the decision, which also affects the banks NLB, NKBM, Abanka Vipa, Banka Celje, Gorenjska Banka and Banka Koper with which the competition watchdog says Lasko acted in concert at the 2009 AGM of Mercator.

The decision of the CPO came just as Lasko was to decide whether to sell its stake alone or join a consortium of banks. If it joined the banks, a majority stake in Slovenia's no. 1 retailer would be put up for sale in an international call for bids.

Lasko, a large chunk of whose EUR 450m mountain of debt is said to be due in June, filed the suit immediately after the office announced its decision on Tuesday.

It has said that the ban put in peril its urgent restructuring plans and that it would use "all legal means available to protect the interests of the owners, companies involved and of the workers".

Meanwhile, Lasko, which was considering selling it stake in Mercator to retailer's Croatian rival Agrokor, also said on Thursday that the KAD fund was demanding a shareholders' meeting that would pave the way for a capital increase at the group.

KAD, which holds a 7% stake in Lasko, is proposing the issuing of shares equaling 50% of Lasko's current capital, which has a nominal value of EUR 36.5m. Lasko's 8,747,652 shares were last available at EUR 8.86 apiece at the Ljubljana Stock Exchange.

KAD added in its demand that it would be willing to participate in the capital increase under the right terms.

The fund said that the dire financial situation of the Lasko group was the reason for its proposal. The group's capital stood at EUR 131.9m at the end of 2010, a EUR 30.7m decrease on 2009.

Moreover, the financial debt is a burden on running operations, imperilling the entire group. The group had a deficit in operating capital of EUR 44.7m in 2010, while financial liabilities stood at EUR 397.5m, KAD said in a press release.

KAD feels that a possible successful selling off of financial investment and non-core assets would not suffice to free Lasko of excessive debt.

The fund pointed out that Lasko's debt-to-equity ratio stands at 3, while the interest on the core company's debt amounted to EUR 13m in 2010, exceeding operating profit by EUR 1.8m.

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