The Slovenian Sovereign Holding (SSH) supports the capital increase in Paloma by Abris Capital (through PPRS Holdings Limited), in the amount of EUR 15 million, at the price of EUR 3.3 per share. After acquiring Paloma shares in the capital increase process, the selected investor will be obliged to publish a mandatory takeover bid in accordance with the relevant provisions of the Slovenian Takeover Act, on the basis of which the existing shareholders, including SSH, will have the possibility to sell their Paloma shares under the same price per share as offered by the investor in the capital increase process. In accordance with the Slovenian Sovereign Holding Act and the SSH Capital Asset Management Policy, the acceptance of a public bid submitted in accordance with the Takeover Act is one of the methods for the sale of SDH's capital assets.
The Slovenian Sovereign Holding holds a 70.97% shareholding in Paloma, d. d., (Paloma), which was obtained on 1 July 2015 by acquiring PDP, d. d. The consent for the disposal of capital assets in Paloma was granted by the National Assembly of the Republic of Slovenia on 21 June 2013. The management of PDP, d. d. which used to manage capital assets in Paloma until 1 July 2015, agreed on the capital increase process to be conducted in Paloma after the company's financial condition was presented by Paloma's Management Board in September 2013.
The capital increase in Paloma is urgently necessary for ensuring the company's existence and its development into a modern and internationally competitive company. The capital increase will provide for the modernisation of Paloma's production facilities, the increase of production capacities and expansion of production at the existing site by way of which the energy efficiency, working environment and conditions of work will be improved in Paloma, together with financial results. Due to technological backwardness and obsolete production equipment, without any capital increase being implemented, the existence and operation of Paloma will be put at risk in the next few years.
Since the existing owners cannot provide for relevant financial funding necessary for the development of the company, SSH will grant its support to the capital increase proposed. The price per Paloma share offered in the capital increase process is acceptable in SSH's opinion, and Paloma and its shareholders might incur damage if such capital increase process fails to be successfully closed.
In SSH's opinion, in addition to EUR 15 million of capital for the modernisation and development of production capacities, the investor's knowledge and experience will ensure Paloma to grow and develop into a modern and internationally competitive company.
The process for the capital increase was run and managed by Paloma's Management Board, together with their legal and financial advisors; on the basis of information received it has been assessed by SSH that Paloma has pursued the goal of achieving the maximum value for Paloma shares held by its shareholders. If any of the existing shareholders or any other interested investors is willing to offer a higher price, such person (as shareholder of Paloma) in accordance with Slovenian legislation has the possibility of making a counter-proposal for the capital increase, offering a higher price per share, prior to or at the Paloma General Meeting at which the Paloma shareholders will resolve on the capital increase. SSH will verify such counter-proposal(s) and consider them if such proposal(s) is / are supported with a credible demonstration on the funding of the transaction (bank guarantee, funds deposited to the escrow account held for this purpose, equity commitment letter). In addition, in accordance with the Takeover Act, interested investors also have the possibility to make a voluntary takeover bid.
The proceeds from sale to be received by SSH will be applied to the settlement of liabilities held by SSH under the Denationalisation Act and other acts.
Abris Capital Partners is a leading independent private equity fund manager, focused on mid-market opportunities in the major countries of Central and Eastern Europe (CEE). Established in 2007, Abris seeks to identify, and partner with, the most successful and dynamic mid-market businesses in Central and Eastern Europe, which can benefit from an input of capital and/or management expertise at both strategic and operational levels. With investment capital of over € 770 million, Abris has obtained financial backing from many leading global investment institutions including corporate and public pension plans, financial institutions, insurance companies and US university endowment funds. Abris has a long-term investment horizon and usually targets transactions in which it is able to acquire a majority or sole ownership position. The typical financial commitment by Abris to any single transaction can range from € 25 to 60 million, with larger commitments available if required. The Abris business operates using regionally-based teams in Warsaw and Bucharest.