Slovenian Finance Minister Mateja Vranicar Erman will try to persuade EU officials to postpone the deadline by which Ljubljana has to sell off Nova Ljubljanska Banka (NLB) at a critical meeting with European Commissioner for Competition Margrethe Vestager on October 26.
Slovenia is obliged to sell off NLB, which was nationalised in a banking sector bail out in 2013, under its commitments to the European Commission. However, plans for an IPO were dropped in June amid a dispute over the pricing of the offer and an ongoing lawsuit over Yugoslav-era deposits in Croatia.
Erman is now due to visit Brussels on October 26 to discuss further steps in implementing Slovenian commitments to the European Commission related to the privatisation, the ministry announced on October 18.
“The aim of the meeting is to identify with the Commissioner what progress was achieved at the working level, and to make further efforts,” reads the ministry’s statement.
Slovenia had committed to sell 75% of the bank by the end of 2017 in a restructuring plan that served as a basis for the European Commission's approval of state aid to the bank in the 2013 bailout. Initially the government planned to reduce its current 100% stake to 25% plus one share via an IPO in 2017. Then on May 11 the European Commission endorsed a request from the Slovenian government for a more gradual sale of the bank – a 50% stake by the end of 2017 and a further 25% by end-2018.
However, preparations for the IPO collapsed the following month when Slovenian Prime Minister Miro Cerar announced that his government had decided to give up on the offering after his cabinet rejected €55 as the minimum bid price per share on June 8.
Since then, there have been “intensive talks and working meetings” between Slovenian and European Commission representatives “with the aim of designing possible measures that could reduce or eliminate the impact of the risk arising from the issue of transferred foreign currency deposits in Croatia on the selling price and the entire sales process,” according to the ministry.
However, the statement acknowledged that, “Despite the constructive approach of both sides, progress is slow.”
The main obstacle to a successful sale of state-owned NLB is the lawsuit launched by Croatia’s Privredna Banka Zagreb (PBZ) against the now-defunct Ljubljanska banka (LB) and its legal successor NLB over savings deposits from the Yugoslav era, which is still being considered in Zagreb. These deposits were repaid to Croatian savers by the Croatian state, which then authorised Croatian commercial banks to recover them in court. The liabilities are estimated at €350mn to €400mn.
“Taking into consideration all the circumstances and possibilities, the government still estimates that it is most appropriate to postpone the privatisation process of NLB and address the issue of transferred foreign currency deposits of Croatian savers in the acquired time, which strongly hinders the implementation of an economically justified privatisation process,” the Slovenian finance ministry said on October 18.
“According to the government, this issue can not be addressed by unilateral measures, but only at the interstate level, and will therefore step up efforts in this direction.”