New details about the loan contract which Agrokor commissioner signed with a US investment fund.
The contract on the roll-up loan signed by Agrokor and US investment fund Knighthead earlier this year shows that the relationship between Agrokro’s government-appointed commissioner Ante Ramljak and the US fund is almost unbreakable. According to the “Contract on loan worth 1.06 billion”, it is apparent that creditors from the US Knighthead Fund have incredible powers when it comes to drafting and enforcing the final agreement with Agrokor’s creditors and on the restructuring of the company itself, reports Jutarnji List on October 26, 2017.
The restructuring plan and the settlement with creditors cannot be made without the approval of lenders of the loan, and the Croatian government is not allowed to not remove Ante Ramljak as the extraordinary commissioner because that could be considered a violation of the loan agreement.
Ramljak was appointed as the commissioner by the Commercial Court, upon the proposal of the Croatian government, so the question is whether this contract is even legal. Also, Ramljak’s objectivity towards Knighthead is obviously an issue as well.
Also, the contract stipulates that disputes between the signatories of the agreement will be settled according to the Anglo-Saxon law, and not according to the Croatian or continental law.
Interestingly, Ramljak has already admitted that he met with Knighthead representatives as early as 30 March, long before he became the government-appointed commissioner, at the time when he was allegedly one of the people who were writing the so-called Lex Agrokor, prompting allegations that the US fund had access to privileged information.
Late on Wednesday evening, Ramljak issued a statement. “Of course, the government or the Commercial Court may dismiss me or any other commissioner at any time, because the appointment and dismissal are carried out in accordance with the Law on Extraordinary Administration Procedure. If such a dismissal were to take place, the creditors could decide that it would not simultaneously represent non-fulfilment of the loan obligations and that the loan would not have to be repaid immediately. If they would assess another commissioner as a good selection, it can be assumed that they would not demand the repayment,” wrote Ramljak in a statement prompted by inquiry of Index.hr.
He also answered the question on the terms of the loan, which state that a written approval of the creditor is required for the Agrokor restructuring plan. “This is true. This provision refers, for example, to new debts which could be taken out by Agrokor or individual companies, or to settlements with creditors of companies which are outside of the Law on Extraordinary Administration Procedure, and it is logical and reasonable that such new debts or settlements require prior opinion of a creditor which has already lent the company 960 million euros. This provision has nothing to do with the settlement with Agrokor’s creditors under the Law on Extraordinary Administration Procedure,” he concluded.
Soon after becoming Agrokor’s commissioner in April, Ramljak signed a loan contract with Knighthead, which is controversial because it gives precedence in repayment to old loans which are now owned by Knighthead, meaning that other creditors will have a much harder time getting back their money which they loaned Agrokor in earlier years.
