ZAGREB, April 11, 2018 – Creditors of the debt-laden Agrokor food and retail group will take over control of the new Agrokor Group via three legal entities based in the Natherlands, while a holding company based in Croatia will be in charge of the group’s operational management, Agrokor’s emergency administrator Fabris Peruško told a news conference on Tuesday.
The creditors have opted for an “ownership structure” in the Netherlands because the country has a rich legal experience with the type of the settlement envisaged for Agrokor. “The group’s operational management will be in the hands of a Croatian holding company based in Zagreb. It will have operational and ownership control over all companies making up the Agrokor group, both those in Croatia and abroad,” said Peruško.
The group’s future ownership structure will reflect its borrowing in the past, he said. He would not specify possible stakes in the new ownership structure, repeating that work on an Entity Priority Model was still under way and that exact ratios would be known in a month’s time.
He dismissed the possibility of former Agrokor owner Ivica Todorić’s return to the group’s ownership structure, stressing that the debt he had left was much higher than the group’s assets.
Speaking of the border debt (debt that was incurred before the introduction of emergency administration and that matured after 10 April 2017), Peruško said that its collection would also depend on Agrokor retailer Konzum’s future operations. Suppliers will be given the possibility to collect another 80 million euros of additional border debt in all Agrokor companies and the collection of that amount will depend on whether Konzum will be achieving results defined by the sustainability plan since most of Agrokor’s debt refers to Konzum and its settlement depends on how Konzum will be doing business in the next four years.
“I believe that this will make it possible for suppliers to reduce their write-offs to the largest possible extent,” said Peruško.
Agrokor’s creditors initialled an agreement on a debt settlement plan, and the group said that the key elements agreed covered the corporate structure of the new Agrokor Group, the treatment and type of settlement of the creditors’ claims incurred before the introduction of emergency administration, the new group’s debt and capital structure, a separate agreement with suppliers on ways to settle the border debt, and the implementation of the settlement plan.
The new companies that will make up Agrokor’s management structure are STAK, NizTopCo, NizHoldCo and HoldCo.
STAK is a company through which existing creditors will take over control of the new group, and it is a special kind of legal entity having the form of a foundation based in the Netherlands that will be the formal owner of the entire new group.
NizTopCo is the future umbrella company, a limited liability company based in the Netherlands. STAK will issue the creditors with depositary receipts on its ownership of the stakes its holds in NizTopCo, and the creditors will exercise their management rights in that company by giving instructions to STAK.
NizTopCo will be the owner of NizHoldCo, a Dutch limited liability holding company that will be the parent company of a new Croatian holding company – HrvHoldCo. The latter will be the parent holding company of all operating companies. The new operating companies will be limited liability companies owned directly by HrvHoldCo, and they will take over the entire assets of Agrokor’s existing insolvent companies, without taking over their old financial obligations.
The purpose is to make sure that those companies remain in business after the settlement without any liabilities, removing the existing external shareholders/members of the Agrokor Group, liens on shares and repo claims, and mutual guarantees.
The Agrokor Group’s stakes in the existing companies, solvent ones, whose assets exceed liabilities, and those based outside of Croatia, will also be transferred to HrvHoldCo and the transfer will not impact their minority and majority shareholders and creditors.
Business operations of the future Group are based on the arm’s length principle regarding intercompany relationships within the Group, meaning that the parties are equal and independent in their relationships. It has been established that the main criteria for determining individual claim recoveries is the EPM methodology which has been used in the largest international corporate restructurings.
It has been agreed that HrvHoldCro will borrow to wholly refinance an existing loan amounting to 1.06 billion euro, the terms of which are yet to be determined.
An agreement has been reached with suppliers on the payment of the border debt, the debt accumulated prior to the emergency administration proceeding. Between 130 and 160 million euro of that debt remains unpaid and it has been agreed that a maximum 80 million euro can be paid in 2018, 2019, 2020 and 2021.
It has also been agreed that the new Group’s retailers will retain qualified creditors as suppliers over five years since the signing of the settlement and sell their goods. All employees will be transferred to the new Group, it was underscored.
According to preliminary data from a report on the emergency administration proceeding in Agrokor until 10 April 2018, which the government took note of today, Agrokor’s Retail and Wholesale division made 1.78 billion kuna in revenues in the first two months of 2018, with a negative EBITDA of 44.9 million kuna. The Food division made 853 million kuna in revenues and 48.5 million kuna in EBITDA, while the Agriculture division made 270 million kuna in revenues and 17.1 million kuna in EBITDA.
