Business News

NKBM Shareholders to Decide on Cap Hike, Hybrid Bond Buyback

Maribor, 11 December (STA) - The shareholders of NKBM, Slovenia's second largest bank, are expected to meet Tuesday to decide on a EUR 50m capital increase and a discounted hybrid bond buyback or exchange.

Ahead of the meeting, the bank is also expected to sign an agreement to sell its 50.99% stake in insurance company Zavarovalnica Maribor to reinsurer Sava Re and the state-run Restitution Fund (SOD).

NKBM had issued two hybrid bonds worth a total EUR 150m to offer the holders of the bonds in mid-November the possibility that it buy them back or exchange them at a discount for non-subordinated securities with 5-year maturity.

The bank said last week that EUR 98m worth of hybrid bonds would be bought back or exchanged on 14 December, provided that a nod comes from Banka Slovenije.

The discount will enable NKBM to strengthen its capital adequacy and push the Core Tier 1 capital ratio up to at least 9% by the end of the year, the bank said.

NKBM chairman Aleš Hauc has suggested in an interview that a successful sale of Zavarovalnica Maribor and the deal with the hybrid bonds might render the capital increase redundant.

The business daily Finance however reported yesterday that there was a "significant likelihood" that the shareholders' meeting will be cancelled due to conditions being set forth by East Capital, a Swedish fund with the biggest share of voting rights.

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