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NKBM Launching Exclusive Talks on ZM Sale with Reinsurer Sava

Maribor, 29 November (STA) - Slovenia's second biggest bank, NKBM, has decided to start exclusive negotiations for the sale of its 51% stake in insurance company Zavarovalnica Maribor (ZM) with reinsurance company Pozavarovalnica Sava. The deadline to close the deal is 21 December, NKBM said in a press release on Thursday.

Pozavarovalnica Sava already holds nearly 49% in ZM and was the only confirmed bidder. Unofficially, Austrian insurer Grawe also vied for the stake in ZM, while Slovenian financial holding KD Group submitted two unbinding bids.

Sava Re, the group around Pozavarovalnica Sava, has said that the acquisition would be funded by internal sources and fresh capital that is to be collected in a recapitalisation.

Pozavarovalnica Sava called on Thursday a shareholders' meeting for 11 December at which owners will vote on the proposal to increase the company's assets by EUR 32.8m to EUR 71.8m. Up to 7,857,143 fresh registered shares are to be issued priced between EUR 7 and EUR 9.

If the deal goes through, Sava Re is to become one of the leading reinsurance groups in the Western Balkans, Pozavarovalnica Sava says. The group holds a 100% stake in Zavarovalnica Tilia.

But if reached, the deal will have to be approved by the Agency for Insurance Supervision and the Competition Protection Office.

By selling the stake in Zavarovalnica Maribor, NKBM is to improve its capital adequacy. The goal is to guarantee an at least 2% ratio of Core Tier 1 capital by the end of the year. The bank moreover plans to carry out a capital injection.

However, NKBM CEO Aleš Hauc told the STA last week that if the bank "successfully carries out the sale of Zavarovalnica Maribor and the repurchase of the subordinated debt [through the issue of the CoCo bonds], there will be no need for a fresh capital injection".

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