Ljubljana, 23 May (STA) - Shareholders of insolvent construction company SCT approved on Monday a plan under which debtors would have their claims converted into ownership stakes, in what is the newest step to stave off receivership.
The plan was endorsed by the SCT Holding, a majority owner of the struggling builder with 78% of shares, and a group of small shareholders representing 1.5% of stock.
As part of the plan, creditors will be given one share (with a nominal value of EUR 35.94) for every EUR 200 of claims they transfer to the company.
In line with an amendment to the proposal endorsed today, the conversion plan will also include creditors with claims secured with mortgages.
SCT, which filed for debt restructuring at the end of last year, has around EUR 120m in total outstanding debt.
The debt conversion is part of a broader financial restructuring strategy that also envisages a EUR 10m capital injection from a strategic partner and a EUR 20m loan from the banks that would later be converted into ownership stakes.
SCT crisis manager Dusan Mes said that talks with potential partners to provide cash were progressing "well". Two companies - one Slovenian and one foreign - are still in talks with the management and Mes expects a decision by Wednesday.
If a partner enters the company, it would allow a vote on debt restructuring, which is a precondition for the other steps, including the conversion of debts. According to Mes, a vote could take place in four to five months time.
"I think that for the first time we have a realistic solution," said Mes, adding that he would be holding talks with banks on Tuesday.
"If they approve the plan together with the new strategic partner, this will be a good decision. Otherwise, we face receivership."
As part of debt restructuring, the company would have to reduce existing share capital, effectively stripping current owners of their holdings.
This has not gone down well with a group of small shareholders represented by the Slovenian Association of Small Shareholders, who have announced they will challenge the decisions taken at today's shareholder meeting in court.