Heineken, Carlsberg said to eye Slovenia's Pivovarna Lasko recapitalisation

By bne IntelliNews December 5, 2014

Dutch brewer Heineken and Denmark's Carlsberg are among the seven companies who have submitted non-binding bids to take part in the recapitalisation of Slovenia's largest beer maker, Pivovarna Lasko, through which the brewer wants to raise at least €75mn of fresh funds, Slovenian media reported on December 4, quoting unnamed sources.

According to the reports, Pivovarna Lasko's management has turned down one of the bids. As a result, along with Heineken and Carlsberg, remaining in the race are investment funds KKR, Mid Europa Parners, CVC Capital Partners and Bain Capital, news service Siol.net informed, citing a report of daily Vecer.

Their bids reportedly vary from €8 to €27 per share. Pivovarna Lasko's stock closed down 4% at €23 on the Ljubljana Stock Exchange on December 4, putting the company's market capitalisation at €198mn.

Consortium of Lasko sellers formed

Also on December 4, Pivovarna Lasko said in a stock exchange filing it was informed by its largest single shareholder, Slovenia's Bank Asset Management Company (BAMC), that a group of Lasko shareholders led by BAMC has formed a consortium to sell jointly their holdings in the brewer. The other members of the consortium of sellers include the state pension fund manager Kapitalska Druzba, local fund managers Alpen Invest and KD Skladi, Slovenian banks NKBM and Abanka Vipa, and the country's largest insurer Zavarovalnica Triglav.

The consortium of sellers controls 44.68% of Pivovarna Lasko's total equity. Yet this percentage might increase in the coming days, since the consortium is open to new shareholders willing to join in.

Pivovarna Lasko said that the consortium has asked the management about how it could get involved in the recapitalisation process in order to start negotiating with potential investors on the share price and other terms of the pending deal. The consortium also wants the management's view regarding hiring a joint consultant.

Pivovarna Lasko reminded that management has been conducting the capital increase procedure in line with the company's restructuring plan. It added the management board will work with the consortium of sellers to examine the possibility of carrying out the share sale parallel with the capital increase process.

Pivovarna Lasko financial woes

In April, Pivovarna Lasko signed a financial restructuring deal with creditor banks, under which it will sell its stakes in the largest Slovenian mineral water producer Radenska and in newspaper publisher Delo, among others, to finance its debts. Along with divesting assets, Lasko is planning to receive the above mentioned €75mn capital injection by the summer 2015. In addition, it intends to merge with another local brewer, Pivovarna Union, by the start of 2016 to enhance cost-cutting measures. Lasko currently controls 98% of Union.

The Lasko Group turned to a consolidated net profit of €12.7mn in January-September from a €10.8mn loss in the same period of 2013, after cutting financial expenses to €13.4mn from €40.1mn. The operating profit in the period, however, slightly fell to €24.6mn from €26.4mn in January-September 2013.

The group's total liabilities amounted €300mn at end-September 2014, out of which €242mn were listed as financial liabilities. The latter were down by €92.6mn compared with end-2014.

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