Elan says that its shareholders, related to the Slovenian state, have signed a letter of intent with Argus Capital, a private equity fund specializing in investments in Central and Eastern Europe, to sell their stake and thereby privatize the Slovenian ski and boating company. The deal would encompass the entire company, since the state-related shareholders now own all of the Elan group's shares.

The group said that the sale could be finalized by the end of April, although the prospective buyer will again review Elan's operations in the coming weeks. Argus Capital, which could not be reached for comment, has apparently pledged to inject capital into the business and to more broadly invest in the company's development. The Slovenian group's two board members, Andrea Košir and Leon Korošec, strongly support the sale: They regard it as the right way to move ahead with Elan's development, and they are actively involved in the discussions.

Argus Capital describes itself as a generalist fund that does not invest in any particular sector but only teams up with companies that already have outstanding management teams. Argus Capital says it typically invests between €10 million and €40 million into equity and holds on to its investments for three to five years. The fund likes to have a controlling shareholding position, including board representation.

Elan has been for sale for nearly two years, but talks were hindered by an investigation launched by the European Union into allegedly unlawful state aid for the company. Uncertainty about a potential fine was removed last September, however, when the European Commission ordered that Elan should reimburse a capital injection of €10 million it received from state-controlled shareholders in 2008. On the other hand, the Commission did not demand the reimbursement of another cash injection of €10 million in 2007.

The ruling capped the potential financial impact of the investigation at €10 million, making it easier to implement a sale. The fine may well be reduced further, as the Slovenian state and Elan both decided to file an appeal. The company said that it had put forward strong arguments and it believed that the government funding would not have to be returned as ordered by the European Commission.

Elan's results for last year have yet to be finalized, but the preliminary results point to steady income.