Although a lot is written about Agrokor, there are many important issues which remain unanswered.
While it is easy to get the impression that a lot is being written about Agrokor and that we, therefore, know everything of importance, there are still many issues which are not entirely clear, reports Index.hr on June 19, 2017.
1. Who exactly wrote “Lex Agrokor”?
The exact list of all contributors to this fundamental law has the status of a state secret. Economy Minister and Deputy Prime Minister Martina Dalić has acknowledged that, along with experts from the Economy Ministry, many legal and financial experts were engaged in drafting the law. The media reported that lawyers from the Šavorić and Partners law firm were among them, and the Law Chamber has announced an investigation into the possibility that they had offered their services for free. The government should publish a list of the authors of the law, which is criticised by many experts and which could activate lawsuits for damages payable eventually by the taxpayer.
2. Who is in Ante Ramljak’s team?
Unlike temporary administrator Antonio Alvarez, who presented his team publicly, government-appointed commissioner Ante Ramljak has never done so. At the first briefing, he appeared together just with communications experts. He also mentioned lawyer Boris Šavorić as a member of his team, but decided against hiring him when the media warned him that he was the same person who wrote “Lex Agrokor”. Their collaboration allegedly broke up when it was discovered that the government commissioner, though an employee of Šavorić’s office, used the email address at savoric.com.
3. Salary of the government-appointed commissioner
Since Ramljak was appointed by the government, the information about his salary should be made public. However, we have not received an official answer to that inquiry. Nacional wrote that his gross monthly salary was 90,000 kunas. Regardless of the fact that Ramljak and his associates are being paid by Agrokor, they are part of the government’s team, therefore information about their salaries should be transparent.
4. Structure of the debt towards the suppliers
Agrokor’s precise debt is still unknown. In addition to the fact that financial reports are suspicious and are under investigation by auditors, not all creditors have yet reported their claims. Two months after the government took over Agrokor, we still do not know how much owner Ivica Todorić owes based on unpaid invoices, bonds and bills of exchange. Who loaned money to him and is now trying to hide it from their shareholders? Agrokor says that the claims will not be known until the end of August or the beginning of September, adding that the information will never be published. They say that these are business secrets of the company.
5. Non-transparent payments to suppliers
New invoices coming from vendors are being paid out of the current revenues of Agrokor’s companies. Two-thirds of the first 80 million euro loan, which was contracted after Ramljak’s arrival, were spent on settling old debts to suppliers. Now they will also receive additional 120 million euros. Part will go to family farms and the rest “will be paid according to the percentage criterion we are still negotiating.” It is not known what criteria will be used. Had the money distribution so far been just, particularly given the rumours that some suppliers have had more luck than others?
6. Why does Ramljak need such a large loan?
The company, which is already 40 billion kunas in debt, has announced it will get another loan of 3 billion kunas. Part of this money will be spent on the repayment of old debts to suppliers. It has not been explained in detail why Agrokor, which thanks to Lex Agrokor (for now) is not required to repay any of the previous loans. Why does it need so much money? Will it perhaps be spent on a more active restructuring process? Since Ramljak came to the company, a small part of old debt has been paid, and shops are still open. But, business is going downhill, and the turnover at Konzum stores is falling. Now, when the government reshuffle is complete, Ramljak said he would close some stores and begin downsizing the company. The impression is that the loan is so large because it is good for creditors, who want to give new money only if they can get priority status for some of their old loans as well. Some of the creditors will be able to position themselves at the expense of other creditors since their old loans now have priority status.
7. The number of old creditors who will never be paid.
The number of creditors who will lose all or most of their money will not be known before the final settlement is reached, and in this case, we cannot blame Ramljak or the government for their non-transparency. But, we can be afraid of their plan which makes many people feel deceived and opens the possibility of lawsuits. With the latest loan, it is clear that the winner will be Knighthead Capital, an American fund which has secured seniority status for its loans. The biggest losers could be Russian banks, which previously gave to Agrokor 1.4 billion euros and bondholders who bought bonds at full price, unlike Knighthead Capital which bought them cheaply before the collapse. For suppliers, a significant write-off is very likely.
