Italian Palladio Holding Group buys Cimos in €110mn deal

By bne IntelliNews October 16, 2016

The shareholders of Slovenian automotive components manufacturer Cimos Group signed a deal on October 14 to sell the company to TCH Cogeme, a subsidiary of the Italian Palladio Holding Group. The total value of the transaction is €110mn and the transaction is expected to be closed in the first quarter of 2017, Slovenia’s so called “bad bank” Bank Asset Management Company (BAMC), announced.

Cimos has been a leading Slovenian exporter for decades, and is one of the 15 state controlled companies earmarked for privatisation by the government in June 2013 as part of its efforts to strengthen the country’s economic recovery after the eurozone crisis. The company was brought back from the brink of bankruptcy in a €169mn debt-to-equity conversion last year, which brought it under majority state ownership.

The largest single Cimos shareholder and the leader of the shareholder consortium with 47.5% stake is BAMC. Slovenian Sovereign Holding, the second largest, holds 24.26%. The remaining stake is shared among several banks: NLB (9.44%), Gorenjska banka (5.74%), Abanka Vipa (2.42%), NKBM (2.2%) and SID banka (0.74%).

According to the BAMC’s announcement, the purchase is an important step towards long term stabilisation of Cimos, one of the most important Slovenian manufacturers of components for the automotive industry that has a large multiplier effect on the Slovene economy.

“The sales agreement, signed [October 14] with TCH Cogeme is important for Cimos for many different reasons. Firstly, it is crucial for Cimos, its workers and its customers because it will support the group's future business. Secondly, it is vital for Primorska region because Cimos is one of very few companies in this region that is on the way to future success. Thirdly, under the new owner, Cimos will return to be an important player in automotive components industry, which will provide beneficial long-term effects for the Slovenian economy. This is a joint success of all parties involved," said the CEO of BAMC, Imre Balogh.

Cimos is based in the coastal town of Koper in southwestern Slovenia, and employs around 2,000 people. One of the biggest industrial groups in the country, it is undergoing operational restructuring.

CEO of TCH Cogeme Gino Berti announced that after the conclusion of the transaction TCH Cogeme will immediately provide Cimos with €20mn fresh capital in order to support planned investments in the modernisation of Cimos' production and the completion of the ongoing turnaround process.

According to earlier media reports, besides the Italian fund, Bosnian businessman Nijaz Hastor also submitted a non-binding bid for Cimos. Hastor, best known in Slovenia for his role in the bankruptcy of former flagship car seat cover maker Prevent, unofficially offered €200mn, RTV SLO reported on March 24.

The company was put up for sale in August 2015, but received fewer bids than expected, local media in Slovenia reported, adding that negotiations with the bidders had been conducted in strict confidentiality in recent months.

In the first nine months of 2015, the Cimos group generated €252.7mn in revenues, while cutting costs by 10% compared to the same period of 2014 and improving liquidity.

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