October 14, 2016 / 1:04 PM / 9 months ago

Slovenia sells car parts maker Cimos to Italy's TCH Cogeme

2 Min Read

LJUBLJANA, Oct 14 (Reuters) - Slovenia has sold state-owned car parts maker Cimos to TCH Cogeme, part of Italy's investment firm Palladio Holding Group, the company set up to reduce the bad debts of local banks said on Friday.

The Bank Asset Management Company (BAMC), Slovenia's 'bad bank', said the sale raised 110 million euros ($125 million), most of which will be used to repay Cimos's debt. It expects the transaction to be completed in the first quarter of 2017.

Slovenia narrowly avoided having to seek a bailout in 2013 after some of its banks, which expanded rapidly when the small economy qualified to join the euro zone, ran into trouble.

Slovenia has been more reluctant than some of its central and east European peers to sell its major companies, including banks, insurers and energy firms, and the government still controls about 50 percent of the economy.

"After the conclusion of the transaction, TCH Cogeme will immediately provide Cimos with 20 million euros of fresh capital in order to support the planned investments for the modernisation of Cimos's production," CEO of TCH Cogeme Gino Berti said in a joint statement with BAMC,

By taking over Cimos's debts to local banks, BAMC became Cimos's major shareholder. ($1 = 0.8928 euros) (Reporting ay Marja Novak; Editing by Ruth Pitchford)

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