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SSH will enforce its pre-emption right for the purchase of 43.226% ownership interest in Sava

Ljubljana, 25 February 2022 - The Supervisory Board of Slovenian Sovereign Holding (SB of SSH) has granted its consent to exercise the pre-emption right for the purchase of 43.226% ownership interest in Sava from York Global Finance Offshore BDH (Luxembourg). SSH and KAD will jointly exercise their pre-emption right. The total purchase price amounts to EUR 38,000.000, of which SSH will pay EUR 32.010 989,99 for York's equity stake in Sava and the purchase price to be paid by KAD for York's receivables due by Sava amounts to EUR 5.989.010,01.  Following the completion of the transaction, SSH will hold a 61.914% ownership interest in Sava, while KAD will hold 28.046%. The combined ownership interest of SDH and KAD in SAVA will amount to 89.960%. For the purpose of carrying out activities related to the implementation of the Tourism Strategy and in connection with the adopted Annual Asset Management Plan 2022, the Government of the Republic of Slovenia RS has increased the SSH’s capital and has thus provided financial funds for the exercise of the pre-emption right.

 

SSH received a notification from York on 1 February 2022, in which York informed SSH about the intended sale of York's ownership interest in Sava as well as of York's receivables due by Sava ("York's exposure to Sava") to a third person and extended an invitation to SSH to exercise its pre-emption right (a purchase on equal terms), in accordance with the concluded agreement and with the exercise period of 30 days.

Following the receipt of the notification mentioned above, SSH carried out all the necessary activities in accordance with the SSH Asset Management Policy. SSH has obtained the necessary technical basis for making a decision, analysed several possible management-related scenarios and carefully considered arguments for taking a decision in the light of SSH's exposure of its role of a potential holder of Sava’s equity stake and its debt. The scenario analysis has clearly shown that the risks and disadvantages of exercising the pre-emption right are significantly lower than the risks and disadvantages of not exercising the pre-emption right. On the other hand, the opportunities and advantages of exercising the pre-emption right have proved to be greater than those presented by the scenario in which the pre-emption right is not exercised. The scenario that considers the exercise of the pre-emption right allows for a number of activities to be carried out both in Sava and, more broadly, in conjunction with other tourist companies, which represents a potential for value enhancement.

On the basis of all the technical basis obtained, the analysis of various scenarios made and after making an overall assessment of the SSH’s position as the Sava’s majority shareholder as well as the creditor, SSH has concluded that the exercise of the pre-emption right is economically justified.  The decision is further supported by other reasons, such as the promotion of the development of tourism activities in accordance with the Tourism Strategy, the consolidation of tourism companies and their restructuring as well as the possibility of realizing the most optimal scenario for asset management in respect of the exit strategy.

After the decision was made,  Ivan Simič, MSc, the President of the Supervisory Board of SSH said: "I am pleased with the decision of both SSH’s bodies to exercise the pre-emption right, which will have many positive effects in the future, as it will enable easier and faster implementation of the Tourism Strategy, the realisation of all the outlined objectives, and thus the growth and further development of the most important tourist Group in Slovenia, through simpler management.” .

"I am convinced that the Sava Group has a good development potential and acting in cooperation with all key stakeholders, we remain committed to achieving the country's goals in the field of tourism. "The first step after the conditions precedent are satisfied, will be the consolidation of the Sava Group and the refinancing of its receivables, which should strengthen the combined tourist Group and provide it with additional investment potential", said Dr. Janez Žlak, the President of the Management Board of SSH.

The rights attached to the acquired SAVA Shares will be exercisable once the conditions precedent are fulfilled and the Slovenian Competition Protection Agency issues a decision that the transaction is compatible with the competition rules.

SSH will dedicate all excess funds arising from the capital increase to activities outlined in the AAMP 2022 with respect to the tourism industry.

At its meeting, the Supervisory Board of SSH also agreed to amend the SSH Articles of Association in connection with the capital increase carried out in SSH.