1.8-3.8 Billion Euro Available to Agrokor Creditors

Total Croatia News

ZAGREB, March 14, 2018 – The estimated value of the companies in the Agrokor Group that is available for their creditors ranges from 1.8 billion euro to 3.8 billion euro according to a document published by the emergency administration in the indebted food retail group on Wednesday.

Agrokor published two documents today, the “Entity Priority Model (EPM) Guidebook” and the “Summary Information Package as per Interim Creditors’ Council Disclosure Policy”.

The purpose of the EPM is to determine stakeholder claims and respective recoveries at each entity in the Agrokor group under emergency administration proceedings. The EPM identifies each entity’s distributable value and the legal rights, ranking and characteristics of each of its claims and the EPM Guidebook explains the settings of this model.

The Summary constitutes the basis on which the EPM is built and will allow informing the stakeholders of the forthcoming discussions about value allocation. Much of the information is preliminary and subject to material change as settlement plan discussions with the creditors’ representatives continue.

This material, for the first time, showcases the Estimated Valuation Summary of Agrokor companies. The estimated value available for the creditors of these companies amounts to 1.8-3.8 billion euro.

The estimated value for each of the companies is expressed as a lowest-highest range and notes that the distributable value available for creditors in each entity may increase beyond valuations as a result of residual equity value in subsidiaries and recoveries on intercompany loans.

The value of Mercator, which is not under the emergency administration, is estimated between 763 million euro and 1.47 billion euro.

Jamnica is next, with an estimated value at 393-577 million euro, followed by Ledo (224-348 million euro), Belje (150-368 million euro), and Konzum (140-336 million euro).

The Summary also shows the Proposed Pro Forma Corporate & Capital Structure of the new Group. A major step to deleverage the current business and make it viable going forward is to convert pre-petition debt into equity and structurally subordinated debt instruments. The document contains a short scheme of the new holding structure owned by the pre-petition creditors, as they will be the ultimate owners of the new Group.

Based on currently available information, the emergency administration also published detailed estimates of Agrokor’s post-restructuring capital structure per company.

It is estimated that up to 530 million euro of pre-petition claims could be deemed unimpaired and hence reinstated at par (or left unaffected) in the new Group post restructuring. Estimated figures are preliminary and based on the current assumption that collateral value is at least equal to the related claim value for every secured claim. Appraisals of collateral are currently under way and the current estimates of unimpaired, and hence to be reinstated, secured claims could change materially based on the appraisal results.

Part of the published materials are the amounts of Super Priority Term Facility Agreement funds that have been on-lent to various Group subsidiaries and generally have been used to repay pre-petition supplier claims, including border debt, and to fund post-petition working capital.

The document also contains information about claims secured by guarantees of other companies in the Group, as well as previously published information regarding old and border debt paid to the suppliers.

By the end of March, it is estimated that 490 million euro of old and border debt will be paid to the suppliers, which includes expected further payments of border debt, remaining old debt payments from the Pool B allocation and the fulfillment of the trade tranche of the roll-up facility intended for suppliers.

Out of this amount, around 188 million euro refers to repaid old debt and around 302 million euro are border debt payments, part of which is currently ongoing.


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