24.07.2008

Droga Kolinska to sell properties on Šmartinska Cesta in Ljubljana to the highest bidder

Droga Kolinska has decided to sell properties on Ljubljana`s Šmartinska Cesta by means of an international call for bids. Production ceased some months ago at the sites which are the subject of the sale, as a result of the considerable reduction in the number of products following the sale of some of our smaller product ranges. The distribution centre on Središka Ulica, which currently employs 40 workers, will no longer be needed. Warehousing operations will be transferred from Ljubljana to the existing distribution centres in Izola and Rogaška Slatina.

Droga Kolinska CEO Slobodan Vučićević offers the following explanation: "The sale of the property and the closing of the distribution centre are the result of a strategic decision to reduce the number of product ranges and the expiry of our production contract with Unilever. Employees in the distribution centre have been informed via workers` representatives of the reasons for the transfer of operations to Izola and Rogaška Slatina. We will be preparing an adequate social programme for these employees and will provide all of them with assistance in seeking new employment."

Management board vice-president Milena Štular added the following comment: "The sale of property in Ljubljana concludes the restructuring of our product portfolio. The money from the sale of this property will be used to reduce the debt of the group`s parent company and for investment in the development of Droga Kolinska`s main product ranges. This will guarantee the long-term future of the group and the preservation of jobs."

The withdrawal of production and distribution activities from the above sites is also envisaged in the objectives of the regulation of the area along Šmartinska Cesta and coordinated with the results of the international town-planning competition for the regulation of this area which was recently successfully concluded by the City of Ljubljana.

Properties will be sold to the highest bidder. The sale procedure includes two site complexes on Kolinska Ulica and Središka Ulica, with a total area of 51,000 m2. The company has sent an invitation to submit bids to around 250 potential buyers in Slovenia and abroad. The investors to whom the invitations are addressed include property funds and companies specialising in civil engineering. Interested parties will be invited to submit non-binding bids by 30 September 2008. The sale procedure is expected to be completed in early 2009 and the new owner would take over the sites in the second half of next year.

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