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Mortgage on Elan Assets Lifted

Begunje na Gorenjskem, 24 December (STA) - Almost 20 years after entering receivership, sports equipment group Elan signed a contract with bankrupt bank KIH and the Gorenjska banka bank lifting the mortgage placed on its assets in 1990. The move will facilitate access to financing for the company.

The settlement, which saw the two financial institutions agree to lift their mortgages on Elan's real estate, means a welcome boost for the sport equipment maker's credit rating.

As a result, Elan will not need to seek a capital injection to finance its operations next year, chairman Robert Ferko said on Thursday.

Ferko labelled the deal a "win for everyone involved". He said that the deal was made possible by improved cooperation between the sports equipment maker and Gorenjska banka, with whom he pledged Elan would continue to work.

He said the move would also help Elan by increasing trust at its partners.

Elan owed Gorenjska banka and KIH a total of EUR 54m in loans dating back to the former Yugoslavia. As part of the deal, it will pay them EUR 7.2m.

It is unclear how Elan managed to negotiate the deal, as it had been reported earlier this year that KIH alone demanded EUR 200m from Elan.

Ferko was also upbeat about the group's operations. Although expected to make a loss of EUR 7.5m, Elan will in fact end the year in the black as it frees up provisions tied to the mortgages.

The group's sales this year were down 10%, mostly on account of a 50% drop in boat sales. However, Ferko expects sales in the marine division to expand next year.

Elan emerged out of receivership earlier this year, ending a process that lasted a whole 19 years.

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