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BAMC’s measure for a final financial restructuring of Mariborska livarna Maribor

Ljubljana/Maribor, 29 June 2017 – Earlier today, as the largest owner of MLM, BAMC lodged a motion with the Maribor District Court to commence a repeated compulsory settlement. BAMC simultaneously provided the company with adequate sources of financing in this phase. These actions will ensure that MLM (which has been successfully performing operational, business and financial restructuring) will have a sustainable level of debt, and allow its continued future growth and development.

In recent years, MLM has been successfully implementing restructuring measures, improving business processes and consequently attracting new orders. The financial effects of these measures have not yet fully materialized, as current revenues and cash flows are not reaching the targets set out in the financial restructuring plan from the 2013 compulsory settlement. Since MLM operates in a capital-intensive industry that requires substantial investments in production equipment, the deleveraging process is progressing at a slower pace than expected. Consequently, at the closing of the first quarter of this year, the management board of MLM established the company was insolvent and that it will not be able to settle the obligations incurred prior to the first compulsory settlement. DUTB filed for the repeated compulsory settlement as it found it the most appropriate way to maintain the operations of the company while creating a sustainable financial structure.

BAMC is working closely with the management of MLM to attain a sustainable debt level for the company, which will allow MLM to attract new business in the future. Among other the measures to address the insolvency issue, a new financial restructuring plan is being prepared, which, in addition to initiating a repeated creditor compulsory settlement, also envisages divestment of non-essential assets and reorganization to improve profitability. At the same time, in accordance with the ZUKSB, BAMC also provided a €1.5 million loan.

The repeated compulsory settlement procedure will only affect obligations vis-a-vis creditors from 2013 compulsory settlement.

BAMC is planning to take an active role in the debt-to-equity swap process in order to decrease its debt level and improve MLM's capital adequacy status.

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