SLOVENIA Law and Practice Contributed by: Vid Kobe and Peter Gorše, Schoenherr Slovenia
In terms of the underlying documentation (both in pri- vate and public deals), acquisition finance agreements will often specifically stipulate that during a “certain funds period”, the obligation of the lender(s) to provide the requisite funding is subject to only a very limited number of conditions, and that the lenders’ rights to terminate the underlying agreement, exercise rights of set-off or similar are restricted. Long-form documentation is typically used for acquisi- tion finance agreements. It is typically not made public but, as a matter of practice, the regulator (Securities Market Agency) may request the disclosure of such agreements. It should be noted that, by virtue of an idiosyncratic (Slovenia-specific) “enhanced” restric- tion on financial assistance in the context of public companies (historically aimed at restricting leveraged buyouts), a prospective acquirer must (as a condition for the permission to publish a takeover offer) prove to the regulator that neither (i) the target company’s assets nor (ii) the target shares (other than those owned by the acquirer) form part of the acquisition finance security package. 3.9 Recent Legal and Commercial Developments Over the past few years, legal practice seems to have developed market-standard solutions to certain (local law) topics that are important in the context of financ- ings, notably around the provision of side- or cross- stream collateral and the associated limitation lan- guage. That said, parties are advised to pre-discuss and align on legal views at an early stage to avoid hiccups in advanced stages. Moreover, an increase in local financing transactions modelled on the LMA’s recommended forms (including by certain Slovenian credit institutions that have historically been transact- ing on the basis of their local bank loan templates) can be observed. Apart from these general observations, there have been no noteworthy recent developments. 3.10 Usury Laws In the context of consumer lending, an interest rate exceeding the statutorily prescribed default interest rate (currently set at approximately 10% pa) by more than 50% (currently meaning interest rates exceed- ing approximately 15% pa) is presumed to be usury and thus null and void. In the event of a dispute, the
lender may refute this presumption by proving other- wise (eg, that the agreement has been entered into between equivalents and/or has a sound commercial basis). This presumption does not apply in the context of lending to corporates (in principle, an excessive interest rate in such a context could still qualify as usury under the general rules of Slovenian contract law, but this is a rather theoretical risk). 3.11 Disclosure Requirements In line with the EU Transparency Directive (as imple- mented into Slovenian legislation), holders of (financial) instruments entitling them to acquire voting shares in a Slovenian public company (or having an equivalent economic effect) must notify that company of acqui- sitions or disposals of such instruments; in turn, the public company must publish this information. In addition, the Slovenian Companies Act contains a provision stating that, in the context of any arrange- ment where a beneficiary obtains “a right to partici- pate in a company’s profits on the basis of a financial investment into such company”, the respective ben- eficiary must be registered with the Slovenian court and commercial register (in the entry pertaining to that company). The scope of this provision is notoriously unclear and it appears not to be used in practice. Directive (EU) 2018/822 (DAC6) also provides for obligatory reporting to the tax authorities in certain cases (see 4.3 Foreign Lenders or Non-Money Cen- tre Bank Lenders ). In the context of financing transactions, interest income paid to a non-Slovenian resident (without a business unit or permanent establishment in Slove- nia) is generally subject to a 15% withholding tax. Repayment of principal or default interest ( zamudne obresti ) does not qualify as income interest and is not subject to withholding tax in Slovenia. The above- mentioned withholding tax applies only to interest income with a Slovenian nexus, basically meaning interest income that is paid by a Slovenian resident (or by a non-Slovenian resident through its business unit/ 4. Tax 4.1 Withholding Tax
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