Slovenia asks for extension of deadline for sale of NLB Bank until the end of 2018

The Government of Slovenia has reported that it has decided to ask the European Commission for an extension of the deadline period within which it needs to privatize its biggest bank, Nova Ljubljanska Banka (NLB).

The Ministry of Finance has reported that Slovenia's obligation to sell 75% of NLB's shares would remain, “but would be carried out in several phases in order to secure stronger legal security of potential investors and the possibility of a higher sales income”. In 2013, the European Commission authorized Slovenia to make capital increases in state banks which had incurred losses due to bad loans, with the obligation of selling the biggest one of them, NLB, 100% owned by the state, by the end of 2017 so that the capital increase would not be deemed as unauthorized state aid according to the EU regulations.

Last year, Slovenia started preparing the sale of 75% of NLB's shares with the mediation and help of Deutsche Bank, but has not asked for the deadline to be extended until the end of 2018, which it is planning to do now.

The Government of Slovenia predicts that around 50% of the shares could be sold in 2017 and the remaining 25%, minus one share, by the end of 2018.

The government believes that the sale of NLB could earn it around a billion euros, as the bank's value has increased as it has operated with profit in the past three years.

As reported by the Hina agency, the media say that, if the EC fails to allow the deadline to be extended, Slovenia might be obliged to sell NLB's branch offices in Serbia, B&H, Macedonia and Montenegro. Those branches made most of NLB Group's operating profit in 2015 and 2016 and their sale would reduce the value of NLB itself considerably.

Vlada Republike Slovenije

Nova Ljubljanska banka d.d. Ljubljana

EUROPEAN COMMISSION Bruxelles

Ministarstvo finansija Slovenije Ministrstvo za finance Ljubljana

Government of Slovenia

Nova Ljubljanska banka

NLB

European Commission

Ministry of Finance of Slovenia

privatization of NLB

sale of NLB