Methods and procedures of sale

Disclaimer: The information below does not constitute any invitation or offer to sell, invest in or trade, nor does it constitute any invitation to place any offer to purchase, invest in or trade the securities. The information presented herein is up to date as on the date of publication. For more information, please contact Slovenian Sovereign Holding (SDH), e-mail: info@sdh.si.
 

 

How is the sale of assets conducted?


The disposition of capital assets held in the ownership of SSH and the Republic of Slovenia, including the sale and swaps of capital assets, represents one of the main activities related to the management of capital assets performed by SSH.

 

Slovenia Sovereign Holding strives for the sale processes to be run in an efficient, transparent and competitive manner and in line with international market practice. For this purpose and with the aim of increasing its credibility with investors, SSH leads the sale processes regarding the largest capital assets in cooperation with renowned international financial and legal advisors specialised in financial advisory services.

 

The fundamental objective pursued by SSH in the sales of equity stakes is the attainment of the highest proceeds from the sale. The sale of the most important shareholdings owned by the Republic of Slovenia and SSH, within the scope of statutory limitations, strives to pursue other goals important from the aspect of providing a stable economic growth; these are: the rise in the quality and capacity of public services, further development of companies, new investment opportunities, entering new markets, ensuring competitiveness, and similar goals.

 

 

In the sale of capital assets, SSH runs procedures in accordance with the Asset Management Policy and international standards

 

The Asset Management Policy is a legal document which presents principles, procedures and criteria which are applied by SSH in carrying out its duties and activities which are stipulated by ZSDH-1. The purpose of the Asset Management Policy is to provide for transparency and traceability of decisions made by SSH. One of larger Chapters is dedicated to the processes for the disposition of assets and acquisition of new capital assets. The Asset Management Policy determines the methods of sale of capital assets, the communication on disposition of capital assets, the sale process in the case of the sale of majority shareholding and in the sale process in the case of the sale of minority shareholding, the management of the sale process; it also includes provisions regarding financial institutions and other advisors in addition to other matters.

 

The processes of sale for capital assets differ in regard to the capital assets held in a company by SSH, the Republic of Slovenia and KAD, and in regard to the value of an individual capital asset as defined in the Management Policy.

 

When capital assets are owned by several legal and/or natural persons, the joint sale process may be implemented in order to attain better results in the disposition of capital assets.

The phases of the process of sale may be divided into the three main areas:

  • preparatory activities,
  • sale process activities,
  • post-sale activities (verifying the meeting of potential additional contractual commitments on the part of the buyer).

 

In the beginning of a sale process, a sales team is formed which is composed of SSH employees who are experts in capital assets management, law, valuation and other disciplines, and potential representatives of other sellers when the consortium of sellers is established. The sales team acts as a consultative body to the management boards of individual sellers which has been assigned the task to run the sale process in individual phases of the process on the operational level and to prepare proposals for decisions to be made by the management boards of the sellers.

 

The final decision on the sale of individual asset is always made by the Management Board of SSH; however, in case of a sale of large capital assets, the Management Board of SSH is required to obtain a consent granted by the Supervisory Board of SSH. The SSH’s Management Board is obliged to obtain a prior consent from the SSH’s Supervisory Board for:

  • the disposition and acquisition of capital assets for SSH and the Republic of Slovenia which exceeds Euro 5 (five) million of the audited book value in regard to the issuer’s book, and
  • the conclusion of contracts on consulting services such as contracts for services rendered by legal and financial advisors, for the due diligence of and appraisal of the company.


The agreement on disposing of assets may be concluded on a conditional basis so that the agreement enters into force if a consent to the agreement is given by the SSH’s Supervisory Board.

 

 

Methods of capital assets sale

 

 

According to Article 16 of ZSDH-1, a financial asset must be sold on the basis of one of the following methods or combinations thereof:

 

  • a public tender carried out as a public invitation addressed to an unspecified or a specifiable set of persons under conditions published in advance which contains all the essential elements of the contract, or
  • a public auction carried out as a public sale under conditions of sale published in advance, and in which the purchase contract is signed with the bidder which meets the conditions and which offers the highest price above the reserve price, or
  • a public call for bids carried out as a public invitation for the submission of bids addressed to an unspecified or a specifiable set of persons for the purchase of a specified asset under the published conditions, or
  • a public offering of securities in accordance with the act regulating the financial instrument market.

 

In a public call for bids, negotiations can be carried out in accordance with the published conditions in order to improve the financial conditions.

 

Financial assets can be sold or exchanged on the basis of a direct contract:

  • when a financial advisor has been selected for the sale of the financial asset in accordance with international practice;
  • if the exchange of a financial asset does not reduce the overall value of the asset, or if the quality of the financial asset is improved, or if a portfolio asset is replaced with a strategic asset;
  • if a debt security or a stock is traded on a regulated or free market in accordance with the act regulating the financial instrument market, and in accordance with the rules of that market, except in the sale in blocks, as defined by the rules for the regulated financial instrument market, which must be carried out in accordance with one of the public methods referred to in the first paragraph of the above mentioned Article;
  • if a public bid submitted in accordance with the act regulating takeovers is accepted,
  • in the sale on the basis of a put option if it is established that a higher price would not be reached with consideration of the costs of the sale on the market;
  • in the exercise of the pre-emptive right of the beneficiary to the financial asset, after one of the public methods has been implemented.