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Deal 5: Klemen Bostjancic on Elektroservisi restructuring with BAMC/DUTB and Banka Sparkassa

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On August 8, 2016, CEE Legal Matters reported that ODI had advised Elektroservisi — which builds, reconstructs, and services electrical power systems and facilities and is closely connected to Elektro Ljubljana — on a EUR 12 million out-of-court restructuring with BAMC/DUTB and Banka Sparkassa. We reached out to Klemen Bostjancic, the Director of BRIO svetovalni center, the financial advisor to Elektroservisi on the matter, for more information.

CEELM:

When did the loans that were restructured originate, and what purposes were the funds used for?

K.B.: The loans originated from 2008 to 2010. The funds were mostly used for a real estate project -- the construction of a larger residential and business complex in Kranj.  To a lesser extent the funds were used for working capital.

CEELM:

How were the debts restructured? 

K.B.: The maturity of debt was prolonged allowing Elektroservisi to sell the real estate and repay the majority of debt with the purchase price. Additionally, new bank guaranties have been granted to Elektroservisi, which enables it to carry on with its core business.

CEELM:

According to the report on the CEE Legal Matters website, the negotiators on the side of the creditors changed several times. Does this refer to the law firms advising the banks, or their internal negotiators? What implact did it have for the debt restructuring process?  

K.B.: The change refers to the change of internal negotiators on the side of creditors and especially to the structural changes. Several mergers of creditors occured during talks regarding the financial restructuring. The impact of these changes was mainly negative, primarily due to the prolongation of the restructuring process. The new participants required additional time to review the documentation, and in one case the cooperation of one of the creditors materially altered after the change of internal negotiators. From the beginning till the end of the process the architecture of the restructuring changed substantially as a result of these changes.

CEELM:

Why did you choose ODI to advise you on the matter? 

K.B.: ODI has acted as a legal counsel in several successful restructuring cases in Slovenia and it is well known for its expertise in corporate restructuring as well as in the banking area.  We wanted to engage someone with experience, who would be proactive in the process.

CEELM:

Did ODI assist you with the original loan? If not, why did you switch counsel?   

K.B.: Elektroservisi did not engage a law firm for the original loans.

 

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