Ljubljana, 10 November (STA) - The shareholders of the state-owned foundry MLM approved on Friday a simplified reduction of the company's registered capital to cover a running loss of EUR 5 million in what is a second attempt of the kind this year to avoid insolvency. This comes as unofficial reports say that a new procedure to sell MLM will be launched next week.
The reduction of the registered capital is envisaged in the financial restructuring plan approved by the company's supervisory board at the end of October.
Under the plan, the creditors, the Gorenjska Banka and SID banks in addition to Slovenian State Holding (SSH), the custodian of state assets, will be asked to approve a one-year moratorium on the repayment of loans.
According to unofficial information, SSH as the sole owner of the Maribor-based foundry approved the moratorium today, while the remaining two creditors are not expected to do so.
A new procedure to sell MLM, which employs around 350 people and which has found itself in major liquidity problems due to the accumulated losses, is reportedly to start next week, the STA has learned from unofficial sources.
All recent attempts to sell the struggling company have failed, with the latest reported interested investor being a Chinese company which, according to unofficial information, sought state aid as part of the deal.
The state, however, is no longer able to approve state aid, as this is impossible under EU rules, because the company had already received over EUR 13.3 million in various forms of state aid since 2009.
MLM has not managed to break even since 2016 despite a restructuring plan. It finished 2022 with a EUR 3.6 million loss, which SSH covered by reducing the registered capital, while the loss over the past three years reached 8 million.
In the new procedure to sell MLM, SSH will reportedly request from the buyer to commit to a minimum capital injection, explanation in detail the method of repayment of loans and establish conditions of a possible lease of the property.
By doing so, SSH wants to avoid unrealistic offers to buy MLM, such as those it has been receiving in recent weeks, the STA has learned.