Naklo/Ljubljana, 23 June (STA) - The takeover of Merkur's chain of retail stores by retailer Mercator has been called off following Wednesday's resignation of Merkur CEO Bine Kordez and a decision by creditors and shareholders that Merkur should be restructured as a whole.
The company's supervisory board said today that banks in principle backed the plan to preserve Merkur in its entirety considering that present problems are a result of poor liquidity.
Home entertainment division Big Bang is performing well whereas the Mersteel metal wholesale business and the chain of hardware retail stores could pick up given appropriate financing.
The supervisors said a restructuring plan would be drawn up in the coming weeks.
Following the decision to leave the company intact, Merkur's majority owner Merfin and Mercator agreed to call off the proposed takeover of the hardware stores.
But Mercator said in a statement that it was still open to other forms of strategic cooperation with Merkur's retail division in the future.
The proposed takeover would have brought Merkur's 43 stores (30 in Slovenia and 13 abroad, mostly in the former Yugoslav republics), as well as 20 franchises (18 in Slovenia and two abroad) under Mercator's wing.
The move was seen as an attempt by Merfin, the company founded by Merkur managers who carried out a leveraged MBO in 2007, to ease the unsustainable debt burden.
For Mercator, the takeover would have been a fast-track for expansion in its key foreign markets in the Balkans.