As Index writes on the 26th of February, 2019, a panel discussion and a study on the restructuring of Agrokor organised by TMA Europe was held today in Zagreb. Its speakers were Agrokor’s extraordinary commissioner Fabris Peruško, his deputy Irena Weber, as well as other most important people who were involved in restructuring the formerly ailing company which once threatened to collapse the Croatian economy almost entirely.
Alastair Beveridge from AlixPartners and Goran Horvat of KPMG Croatia also spoke, as N1 reports. Peruško stated that if this key Croatian company was in Germany, it would have had 650 billion euro impact on the budget.
In addition to describing the impact it would have had on the budget over in Germany, Peruško also added that if Agrokor existed in Germany, it would be able to employ a massive 900,000 people and the suppliers themselves would have five million employees.
He detailed the entire history of Agrokor’s long and often agonising restructuring process, from its liquidity and its huge debt problems, all the way through to the development of a special law to the settlement process.
“The Agrokor administration tried to resolve the situation, and at the same time the government attempted to create Option B in case the management failed to come up with solutions with large banks and suppliers. The existing law didn’t foresee a procedure for such a large company and the government issued a law on April the 6th based on the Italian case of Parmalat, and Agrokor’s leadership resigned, after which the extraordinary administration entered [into the company] on April the 10th,” stated Peruško.
The law protected 60,000 jobs in Agrokor and prevented spill overs to other suppliers, ultimately stopping the chance of bankruptcy of Agrokor’s numerous affiliated companies.
”As I said at the beginning, we’re talking about more than 3.5 percent of revenue in the Croatian budget, and we’ve prevented the spilling over of this to other countries because Agrokor is the largest employer in Slovenia and Bosnia and Herzegovina, and the second [largest] in Serbia, it all coincided with the tourist season and Agrokor is the largest supplier of tourism infrastructure. The economy has recovered from the recession and a new shock would have had a devastating effect on the economy,” said Peruško, announcing the following steps in Agrokor’s restructuring process, ie the transfer of operations to its mirror companies, as well as the business plan.
Alastair Beveridge from AlixPartners, a company which was a frequent target of ex Agrokor boss Ivica Todorić’s accusatory blog posts, referred to Agrokor’s restructuring as being unique in this region and said that one of the biggest problems (which is rather characteristic of administrative bodies in all sectors in Croatia in general) was the lack of information. He added that the amount of cash was shockingly mininal and that at one point, a mere ten kuna alone sat in the gigantic company’s account. Beveridge’s remarks are a terrifying reminder of what could have become of Agrokor, its many suppliers, jobs, and the Croatian economy.
“Many companies had ceased their production, so one of the issues was launching production, and that’s what we needed to collect cash for. We had to look at each business well and set priorities. With nearly fifty assistants, we raised almost 400 million euros. I think it’s a big step to borrow money to such a huge company. In the end, we had two offers, only one could manage to arrive in time, we managed, with the help the Croatian National Bank, to secure 540 million euro of fresh money which came in early June, which saved the company,” Beveridge said.
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