More than eight months after the Croatian state took control of the hugely indebted Agrokor company, the management has decided to transform debts owed to creditors into ownership of the company.
As part of the temporary state extraordinary management – which may last up to 15 months– Agrokor’s creditors’ council – which gathers suppliers, bond owners and banks to whom the company owes money – on Wednesday agreed that the money the company owes them will be transferred into ownership.
Speaking on N1 regional TV on Wednesday, Agrokor state extraordinary manager Ante Ramljak explained that the group would also be downsized and transformed into a holding.
Profitable parts of the group will put into this new holding, which will pass into the ownership of all the creditors.
Other, non-profitable, parts of the group will be closed in bankruptcy procedures. Part of the debt will be written off in agreement with the creditors.
“We received support from all members of the provisional creditors’ council on the settlement structure; we are satisfied with this structure, and can continue to work on the details of the percentage of total debt recovery of the creditors,” Ramljak said.
“Over the next two to three months, we will be following the plan, based on the architecture of that settlement, determining the final proceedings, in other words, how big the recovery of their debts will be,” he added.
Ramljak noted that the owners of 67 per cent of the company’s debt of some 7.4 billion euros have to agree on the final settlement for it to become valid for all of them.
He added that the new holding might change its name.
If a settlement is reached, Agrokor’s founder, Croatian businessman Ivica Todoric, would no longer be the company’s majority owner.
Agrokor’s state management in October revealed massive irregularities in the company’s accounts, after which Ramljak filed criminal charges against Todoric.
Police have since searched the private homes of Todoric, his family and other former top officials, temporarily arresting and soon releasing some of them.
Before police searches began, Todoric left Zagreb for London. After a European arrest warrant was issued against him, he turned himself to the police in London in November.
The magistrates’ court in London ordered him to report back to the court in April, when it will assess the case for his potential extradition or take over the trial.
The company’s role in Croatia’s economy is massive. Revenues of 6.5 billion euros in 2015 comprised almost 16 per cent of Croatia’s total GDP. It also has around 40,000 employees.
Agrokor employs another 20,000 people in neighbouring Bosnia and Serbia, while it is believed that suppliers and companies for the Slovenian retailer Mercator – which Agrokor bought in 2014 – employ around 70,000 people in Slovenia as well.