Ljubljana, 28 December (STA) - The EUR 250m capital injection for Slovenia's largest bank, NLB, through the issue of new preferred shares planned for the end of 2009, has been postponed to the first quarter of 2010, dailies Finance and Dnevnik write on Monday.
According to the papers, the main owners - the state and Belgian banking group KBC - have failed to agree on terms under which the Belgians would take part in the capital injection. NLB is in majority state-ownership, while KBC holds a 30.6% stake.
"There was a change in the timeline of the capital injection in the bank because of negotiations between both main shareholders of NLB, so [the cash injection] is expected to be carried out in the first quarter of next year," NLB said in a press release today.
Finance Minister Franc Krizanic confirmed the news for STA, adding that the state would carry out a capital injection on its own. He however left the window open for other owners, including KBC.
The NLB supervisory board gave its seal of approval to the management's proposal for the cash injection on 16 December. The issue of fresh shares was originally planned to begin on 28 December and run until 11 January 2010.
"We will be happy if someone else takes part in the capital injection," said Krizanic, adding that otherwise the state would provide its own funds in the amount allowing the bank to expand its activities in SE Europe, while the bank is allowed to increase its market share in Slovenia.
KBC, which puled out from the latest capital increase in the spring of 2008, has still not decided whether to join the planned cash injection. The state has good relations with the Belgian banking group, Krizanic said.
According to him, KBC has decided to think about the potential cooperation until 11 January, and this is a reason why the bank decided to postpone the capital injection.
The state indents to deposit in banks the amount envisaged for the capital increase in the 2009 budget in banks and use it in the first half of 2010 for the same purpose, Krizanic said.
In line with the plans, NLB shareholders will be first in line for the new shares, with any remaining shares available to other investors, including the public, in a potential second round.
The supply of fresh capital is being sought by the management as a means of securing sufficient capital to respond to a potential increase in loan activity, and to provide sufficient provisions in the event of continued economic contraction, NLB said earlier this week.
Other details of the new share issue will be included in the prospectus the bank will issue following approval from the Securities Market Agency.