The European Commission on Friday okayed a plan proposed by the Slovenian government whereby at least 50 percent of the stock of Nova Ljubljanska Banka (NLB) is to be sold by the end of this year, and an additional 25 percent in 2019.
With this decision, the money invested by Ljubljana in 2013 as the injection of fresh capital in the bank no longer amounts to state aid incompatible with European Union rules.
Slovenia was supposed to begin the process of privatisation of the largest state-owned bank in early 2017. However, the government led by outgoing Prime Minister Miro Cerar failed to do that, which prompted the Commission to launch an investigation in the first half of 2018.
In the meantime, Slovenia has submitted a commitment package for NLB which averted any possible sanction against the country.
"The new commitment package proposed by Slovenia includes strict deadlines to complete the sale of 75 percent minus one share of NLB. The first significant sale tranche of at least 50 percent plus one share will be sold by the end of 2018 and the Slovenian government will reduce its stake in NLB to 25 percent plus one share by the end of 2019," the Commission said on its web site.
"If Slovenia does not respect these deadlines, a divestiture trustee will be appointed to take over the sales process. This commitment is important, as the Commission in the January 2018 decision already suggested that a fully empowered divestiture trustee could further improve NLB's viability," the EC reported.
European Commissioner Margrethe Vestager, in charge of competition policy, said that "the sale of NLB was an important remaining milestone of NLB's restructuring plan, which allowed us to approve over €2 billion of State aid to the bank in 2013. Therefore, I welcome Slovenia's commitment to a clear time path to achieve this sale. Thanks to this, the Commission can today approve Slovenia's new commitment package for NLB, ensuring that the bank will be a viable long-term player in the Slovenian banking market."
Slovenian Finance Minister Mateja Vranicar Erman said she is satisfied with the results of the negotiations in recent months.
Slovenian parliament in July passed legislation which deemed claims involving the transferred savings of Croatian nationals who had accounts in the now-defunct Ljubljanska Banka part of the issues stemming from the succession of the former Yugoslavia. The passed bill is intended to protect the NLB bank from claims in Croatia, and pave the way for the its privatisation..
The majority of Slovenian lawmakers had said that the new legislation will enable faster privatisation of NLB, and may help the bank achieve a higher estimated value on the market, without the burden of possible damages stemming from lawsuits before Croatian courts.