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NLB Shareholders to Decide New Recapitalisation

Ljubljana, 12 November (STA) - The shareholders of Slovenia's top bank NLB will meet on 14 December to sanction a new capital injection of up to EUR 80m in exchange for contingent convertible bonds. The meeting is also expected to endorse the issuance of EUR 1.9m-worth of new shares to be bought by the state-run KAD and SOD funds.

The management and the supervisory board propose the shareholders' meeting to authorise the management to increase the share capital by up to EUR 79.9m by issuing up to 9,578,232 fresh ordinary shares in a one-off action or in several steps.

These new shares would be swapped for the COCO bonds that were paid in by the state in June in a move that provided the bank with a EUR 320m-worth hybrid loan. The pre-emptive right of exiting shareholders may be excluded in the process.

The bank first plans to issue 222,647 ordinary shares, which it will offer to prospective buyers without a prospectus at the price of EUR 8.35 apiece. The shares are to be paid in by the Pension Fund Management (KAD) and restitution Fund (SOD), which supplied NLB in June with EUR 61m in fresh capital.

The European Commission found the price per share had been excessive at the time, which is why it ordered NLB a new recapitalisation by the same amount. The EUR 1.86m recapitalisation needs to be carried out within 90 days after the corresponding decision by the shareholders' meeting, that is by mid March 2013.

NLB's biggest shareholder is the state, which together with KAD and SOD has a combined shareholding of 59%. The Belgian KBC bank owns roughly 22% in the Slovenian bank.

The shareholders will also decide on the appointment of two substitute members of the supervisory board after four of its ten members stepped down in recent months.

KBC representative Jan Vanhevel, who stepped down in February 2011, is to be replaced by Gael de Pontbriand, while Matjaž Schroll, who resigned in August, is to be replaced by Marianne Okland as a representative of the state.

According to a report in the daily Delo, supervisors' resignations are related to the central bank's instruction that competent staff be appointed to new supervisory boards at state-owned banks.

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