|Opis:||From its beginning at the end of 2008, one could hardly have imagined that the financial crisis would have such an enormous negative impact on the global economy. A slowdown of economic growth across all industries and across almost all world economies has had a significant effect not only on the lending potential of banks and investment activity of companies, but also on the increasing insolvency levels.
According to the data for the Slovene banking system as of 31 December 2011, the total amount of impairment losses on non-performing loans (NPLs) reached €1.16 billion, which accounted for 81.5 percent of the gross income of all Slovene banks. The volume of NPLs and the number of defaulting customers are increasing, as a result of which banks need to make additional loan loss provisions. This has an adverse effect on banks’ capital position and capital ratios, leading to banks being in constant need of fresh equity. In the period from 2009 to 2011, the largest proportion of impairment losses incurred by banks related to companies engaged in the following industries: the financial holding industry, the construction industry, the real estate agency industry, and the manufacturing industry. This situation has its roots in a time of economic boom and sufficient availability of funding at favourable borrowing rates, when banks were prepared to finance the projects without investors’ participation. Both investment projects and takeovers were financed mainly by debt, and it should be mentioned that the ruling political parties played an important role in the financing of takeovers in Slovenia.
Takeover activities are usually more intense during periods of economic growth and higher returns. The repayment of loans taken to finance takeovers, especially management buyouts, was in the past based on the cash flow of the target company. This was due to the fact that, in most cases, the acquirers were special purpose entities, set up with a minimum capital and owned by managers of the target company. Once the real estate and/or stock price bubble burst, the value of collateral provided as security for loans granted to finance takeovers was too low to cover the losses banks would incur in the case of the occurrence of a critical event. To protect themselves, banks required the loans be repaid or additional collateral be offered, which acquirers were unable to provide. As a result of their reduced economic activity and a drop in their sales revenues and return, the acquirers or target companies failed to meet their repayment obligations.
Because the value of collateral fell to below the level required and as the acquirers were not able to repay the loans they had taken to finance takeovers, the banks that granted these loans had to record high loan impairment losses. The restrictions with respect to establishing collateral prior to a takeover are regulated by the Takeover Act, as amended. Following a takeover, the collateral provided as security for loans consisted only of the pledge of shares issued by the target company instead of also including the pledge of immovable property owned by the company being taken over. The Takeover Act, as amended, imposes restrictions with respect to takeover activities by determining the takeover threshold at which acquirers are obliged to announce a takeover bid.
If acquirers violate the provisions of legislation governing takeovers, the regulator may deprive them of their voting rights, thereby intervening in the governance of the acquired company and, consequently, in the formulation of its dividend policy. The conditions regulating status changes of the parties involved in takeover activities are set out in the Companies Act, as amended.
Takeover activities take place in all economic environments, even in the times of economic slowdown. The decision of a commercial bank to finance a takeover should depend on numerous factors, including the business plan of the takeover target, the performance of the industry in which it operates, its sales markets and, in particular, on a high|