20.Aug.2014

BAMC rejects debt-to-equity swap proposal due to a lack of a viable financial restructuring plan for TIB Transport

In the course of the compulsory settlement proceedings, the creditors submitted EUR 7.1 million worth of claims, of which BAMC’s share amounts to 1.3% of the total financial claims. BAMC is the holder of claims against TIB in the nominal sum of EUR 161,982.26, acquired from NLB on the date of the transfer of non-performing assets. BAMC has not yet acquired Abanka’s claims held against TIB. BAMC representatives have met with the company’s management on multiple occasions, as well as conducted telephone interviews and on-site visits to the company headquarters in Ilirska Bistrica. Based on the presented financial restructuring plan, like most of the other creditors, BAMC rejected the proposed debt-to-equity swap because it is of the view that the company’s management does not have a viable plan to provide the necessary funding essential for the company’s operations to continue unhindered. BAMC sent written notification of its decision to TIB Transport on 18 June of this year.
Financial data analysis has shown that over the past four years, EBIT had been negative, ranging between 0.4 and 0.6 million euros. Furthermore, the company only operated with a profit one year over the past 15 years. Comparison of the financial figures for the first half of the 2014 period reveals a marked deviation from the targets defined in the financial restructuring plan, which is a clear indication that the plan was unrealistic to begin with. Furthermore, even if the compulsory settlement were to be confirmed and the company continued to operate, it would still require additional funding to finance the operating capital, new bank guarantees required for participation at public tendering procedures, and regular maintenance of the fleet to ensure cost efficiency.
BAMC also met with the Ministry of Finance to discuss the proposed conversion of DURS’s claims to equity. At the request of the Bank of Slovenia, BAMC also presented its understanding and position on the matter to a representative of the BS.
Through the debt-to-equity swap, BAMC would get a minimal equity share. In addition, BAMC would also lose all of its collateral. For this reason, the competent body decided that BAMC will not to approve the financial restructuring plan.
 
 

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