ZCZC
BCN-07
CROATIA-ECONOMY-RETAIL-AGROKOR
Croatia retail giant Agrokor set to avoid bankruptcy
ZAGREB, July 5, 2018 (BSS/AFP) – Croatia’s ailing food and retail giant
Agrokor, the largest employer in the Balkans, was set to avoid bankruptcy
Wednesday as its creditors backed a multi-billion euro debt deal.
Under the agreement, most of Agrokor’s creditors will write off some debt
and convert the rest into equity in the struggling retailer.
Prompted by Agrokor’s crushing debt of around 58 billion kunas (7.8 billion
euros, $9.1 billion), run up through aggressive expansion and expensive
borrowing, the parliament in 2017 named a crisis manager tasked with
restructuring the company.
More than two-thirds of over 3,000 creditors backed the deal, the state-run
HRT television reported.
The impact of Agrokor’s crisis goes beyond Croatia, a European Union member
of 4.2 million people.
Throughout the region the company employs around 60,000 people, two-thirds
of whom are in its home country.
Crisis manager Fabris Perusko hailed “solving a threatening collapse of
Croatia’s largest company which would have a devastating consequences for the
economy in both Croatia and the region.”
Agrokor was now transitioning “into the hands of those to whom it owed
money … and as future owners they undertake full responsiblity for its
future,” he said quoted by HRT.
The creditors who voted for the deal represent more than 80 percent of the
overall claims.
The vote was held at a Zagreb sports hall due to a large number of
creditors, who included local banks, suppliers and bondholders.
The deal for loan write-offs and the debt-to-equity swap still needs to be
confirmed by a Zagreb court, most likely Thursday.
The deadline for the deal is July 10 after which, failing a solution,
bankruptcy proceedings were to be initiated.
Russian state-owned Sberbank, the Zagreb-based group biggest creditor, is
becoming the company’s biggest single stakeholder with a nearly 40 percent
stake. Sberbank and another Russian bank, VTB, acquired more than 46 percent
of the company.
The deal’s implementation would last for months.
The issue has posed a serious challenge to the government of conservative
prime Minister Andrej Plenkovic.
Deputy prime minister Martina Dalic, who played a key role in Agrokor’s
restructuring, was forced to resign in May amid allegations of conflict of
interest during the process.
Agrokor’s fugitive founder Ivica Todoric is in Britain and is fighting
against extradition to Croatia.
BSS/AFP/HR/0950