Kranj, 17 December (STA) - Matej Narat, former management board member of NLB bank, was named the chief executive of the holding Sava late on Thursday as part of a long rumoured shake-up at the troubled company.
The supervisory board named Narat to the post after Janez Bohoric, the chief executive since 1996, agreed to end his term in March 2011. Bohoric will stay on as adviser to the management.
Bohoric has been eased out after the company ran into trouble over financial investments gone awry.
Sava's core business appears sound but it reported a EUR 80m loss for the first nine months of the year after booking a EUR 71.3m write-down on its investment in insolvent retailer Merkur.
Under Bohoric Sava had taken an active part in the ill-fated management buyout at Merkur, ending up with a significant stake in the retailer as part of a deal with Merkur managers to help them with the buyout.
Due to mounting problems Sava has also had a rough ride on the Ljubljana Stock Exchange this year, losing 60% of its value since the start of the year, compared to an 18% loss for the benchmark SBI TOP index.
To shore up its finances Sava also announced it would offload its 23.83% stake in Abanka, the country's third largest bank, which is worth about EUR 80m at current market prices.
However, a majority stake in Sava will also be put up for sale, according to reports by Dnevnik, which said that some of its biggest shareholders, most notably the financial holding NFD, faced margin calls on loans that they insured with the rapidly declining Sava stock.
Problems at Sava are symptomatic of the troubles faced by a majority of Slovenian financial holdings, which had grown rapidly prior to the crisis and forged a complex network of cross shareholdings when share prices were rising.
However, when share prices began to decline in 2008, many of the holding companies saw their portfolios shrink and were unable to repay mounting debt burdens, triggering a cascade of margin calls that has yet to settle down.