The headquarters of Agrokor company in Zagreb, Croatia
Photo: Antonio Property / Reuters
The Croatian authorities have prepared a bill to protect the economy from possible bankruptcy of the largest private companies in the country Agrokor. Key creditors of group — the savings Bank and VTB
The Croatian government has prepared a bill designed to protect the national economy from problems Agrokor, the largest company in the former Yugoslavia, which provides 15% of GDP, reported Croatian newspaper Jutarnji List, citing senior sources. In a note, not the document settings. Agrokor is the largest employer and owner of agricultural land in the country with a population of 4.2 million people and the largest food producer and food retailer in the Balkans. The government refused to comment on the message Jutarnji List. “This is a private company and we do everything in our power — said Reuters the representative of the Croatian government. — We are in continuous contact with stakeholders”.
Agrokor unites more than 20 companies and is among systemically important companies of Croatia. In the state group with operations in Slovenia, Serbia, Bosnia and Herzegovina and Hungary, has 60 thousand employees. Annual revenue Agrokor makes €6.5 billion ($7 billion). Problems Agrokor, whose interests range from ice cream and mineral water to the olives and mayonnaise, is a serious cause for concern army group suppliers, according to Bloomberg. Bankruptcy Agrokor could cause large-scale financial crisis, according to the Agency.
Poor financial position Agrokor — a consequence of falling profits due to increasing competition with retailers-discounters and aggressive growth strategy. The group acquired the debt-ridden assets, which was taken on the bond market and the risky strategy of borrowing. The situation worsened in January, after Agrokor are unable to draw another syndicated loan, citing unfavorable market conditions. As a result, the holders of bonds of the company began their urgent dump. In the end, the savings Bank, whose investment in the company has exceeded €1 billion, had to rescue the group and allocate €300 million ($323 million) to settle accounts with vendors, wrote weekly Croatian Vecernji List.
“It all happened very quickly, said Bloomberg Lutz Neumeier, Manager at Landesbank Berlin Investment GmbH, the portfolio of which are bonds Agrokor. — [Owner of the group, Ivica] Todoric missed several opportunities to put the company on more solid financial footing. The savings Bank had to intervene to save the company.”
VTB Bank is the second largest lender Agrokor, according to Bloomberg. In November the Austrian branch of the Bank agreed to a postponement of the date loan repayment Agrokor volume €340 million, follows from materials of the group. Sberbank and VTB Bank owns more than a third of the company’s debt, according to the calculations of Bloomberg. In January, the Croatian newspaper Hrvatska Danas reported that Sberbank may receive up to a 90% stake in Agrokor, if the group does not pay its debts. Now the founder of the group Todoric owns 95% stake in the company. Among other Agrokor creditors — the banks BNP Paribas, Credit Suisse, Goldman Sachs and J. P. Morgan Securities.
Friday, 17 March, Bloomberg, citing sources reported that the savings Bank carries on negotiations with other debt holders about changes in the leadership of Agrokor in exchange for refinancing and maintaining continuous operations of the company. “We will consider jointly with the shareholders of a construction that does not contradict the current legislation and will meet our requirements and the requirements of other key lenders, confirmed a day later the Deputy Chairman of Sberbank Maxim Poletayev. — We have received from shareholders confirmation of their willingness to consider our proposals.” The main creditors with the help of consultants is preparing a liquidity plan for three months, said Poletayev. According to him, after the issue with the current liquidity of the savings Bank is ready to consider the possibility of long-term debt restructuring Agrokor. “We don’t want to manage a company or become its owner and is not considered”, — said a top Manager, quoted by Bloomberg.
“We do not feel able to manage the largest retailer in Eastern Europe. This is the last thing we wanted,” said 21 March, the President of Sberbank German Gref (quoted by Reuters). “We continue to support them, — said Gref. We will do everything that the company survived and solved their temporary problems. There is a plan out of this situation, agreed with us.” Top Manager also denied reports that Sberbank wants to exploit the situation in order to “capture” Agrokor, saying that those who think so, probably “sick manias of all kinds”.