Business News

Majority Stake in Sava to Be Put Up for Sale, Paper Says

Ljubljana, 05 December (STA) - Over half of the Kranj-based chemicals-through-tourism group Sava is to be put up for sale before the end of the year, daily Dnevnik reported on Saturday.

Major shareholders whose stock exceeds 50% of Sava have already signed a shareholder agreement, promoted by HFD Holding director Stane Valant, whose company is severely indebted, said the paper.

The reason behind the move is said to be financial difficulties of Sava's major private shareholders: troubled hardware retailer Merkur (6.72% stake) and a group around investment company NFD, which holds a combined 14.34% share.

Dnevnik also mentioned PSL Storitve, a company joining several top Sava managers, who however deny being behind the company.

According to the daily, the companies are in serious trouble after they used Sava shares as collateral for bank loans at much higher prices than their current market value.

Over the past two months, the Sava share halved to end trading on the Ljubljana Stock Exchange at EUR 92.16 this week.

State-owners of Sava are meanwhile the KAD and SOD funds, which hold a combined share of nearly 30%.

Indebtedness was also behind a recent decision by Sava and some other shareholders of Abanka Vipa to sale a majority stake in Slovenia's third largest bank.

Sava reported a EUR 80.3m loss for the first three quarters of 2010 after booking a EUR 71.3m write-down on its investment in insolvent Merkur.

Group net revenue dropped 1% year-on-year to EUR 132.8m. In the absence of the write-downs, which totalled EUR 81.1m, the group believes it would have broken even.

Sava's core business is the rubber division, which accounts for around 60% of group sales.

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