Bad Bank Taking Over Major Slovenian Hotel Operators

Bad Bank Taking Over Major Slovenian Hotel Operators


The Bank Asset Management Company (BAMC) announced on Friday a takeover of several major Slovenian hotel operators, including Sava Turizem, via a debt-to-equity conversion that marks "a new strategic approach through which we will develop our assets in the sector".


BAMC CEO Torbjörn Mansson said at press conference that it would probably take two to five years to improve business operations

BAMC CEO Torbjörn Mansson said at press conference that it would probably take two to five years to improve business operations

The claims that banks transferred to BAMC include those of firms who own 41 hotels with the associated facilities. These include Sava Turizem, Istrabenz Turizem and Hoteli Bernardin.

BAMC said it had taken over the hotels to improve business operations and increase the value of these assets. It does not plan to stay long-term owner, it added.

BAMC CEO Torbjörn Mansson said at today's press conference that it would probably take two to five years to improve business operations. The bad bank also plans to hire a consultant for this purpose.

"BAMC estimates that this will secure a 60% increase in the value of the assets, which will be returned to Slovenia and its taxpayers," the bad bank said.

In the case of Sava Turizem, Slovenia's largest tourism company and part of the once mighty Sava conglomerate, BAMC established along with other creditors that it would not be able to back Sava's restructuring plan. It decided for a claims-to-equity conversion, which gave it a 99.05% stake.

A 29% share will now be transferred to a newly founded company.

Mansson said the bad bank could not agree to the write-off of almost EUR 50m in claims and the allocating of Sava turizem's profit for the paying off of the holding's debt in the next five years.

The bad bank believes revenues could be increased, while cost-cutting could be more efficient. The money must be invested back in the sector, Mansson said.

BAMC plans to separate the activities of managing of hotel brands from the managing of real-estate.

Mansson expects Sava to go into court-mandated receivership next week.

Sava owns hotels in Bled and hotels in the spa resorts of Moravske toplice, Terme Lendava, Terme Ptuj, Terme Banovci and Zdravilišče Radenci.

Istrabenz turizem owns the Kempinski Palace Hotel Portorož, the Lifeclass Grand hotel Portorož and the hotels Apollo, Riviera, Slovenija, Neptun and Mirna.

Bernard has hotels and holiday apartments in Portorož, Izola, Strunjan and Piran, among them the hotels Bernardin, Historion, Vile Park, Barka, Haliaetum, Mirta, and Salinera.

The BAMC CEO said that BAMC had exposure to 30% of all hotel capacities in Slovenia and that the business operations of these urgently needed to be improved.

The bad bank said it was in contact with the Finance Ministry and Economy Ministry to secure synergy effects.

It has also informed the central bank of the move, since Sava owns 49% of the Gorenjska banka bank. Mansson believes the change in Sava ownership should not affect the bank's operations.

Meanwhile, Sava has labelled the move illegal, saying "BAMC confiscated the shares even though the effects of preventive restructuring are still valid, including the staying of the maturity of claims".

Sava wrote that "the plunder of the shares" was executed in violation of credit contracts and insurance contract provisions, since BAMC's claim had not even been due".

The managements of Hoteli Bernardin and Istrabenz Turizem were also caught by surprise and have not been officially notified of the change in ownership.

They said they had been regularly meeting their obligations from their respective restructuring contracts, so they saw no reason for the move.

"This information surprised us and unfortunately brings an element of insecurity into our business operations," company Hoteli Bernardin said.