A major cash injection for the embattled giant.
Owners of Agrokor bonds, led by US fund Knighthead Capital, offered Agrokor a loan in the amount of 480 million euros. Another 50 million euros will be provided to suppliers, so the total loan amounts to 530 million euros, reports Index.hr on June 8, 2017.
However, the total credit arrangement will amount to 1.06 billion euros, of which new borrowing amounts to 530 million euros, while the remaining amount will cover the old debt.
The loan will include the so-called ”roll-up” model, which means that the same amount of old loans will receive priority status, with 4 percent annual interest. According to sources, 150 million euros will be used to pay an old debt to suppliers, which should help stabilise their business operations.
Agrokor says that the major part of the new loan will be used to prepare for the tourist season and resume regular operations. “This is Agrokor’s final borrowing under extraordinary administration, which will create the necessary prerequisites for the successful restructuring of the company,” said Ante Ramljak, the government-appointed Commissioner in Agrokor.
Due to the roll-up model being used for the new loan, Sberbank has already demanded a court injunction against the new funding, considering it unfair for old creditors not taking part in this round of financing.
“This is the final loan which the Agrokor Group will raise in this form, and I think this is the last credit that the companies which are part of the Agrokor system will get in order to normalise their operations,” Ramljak added. “If, after this funding, any of the companies are still not profitable and able to survive in the market on their own, then they will have to go into liquidation. Now comes the time for restructuring, now comes the time to agree on a settlement with creditors, and I think we are entering a calmer phase,” Ramljak said.
“At today’s meeting of the creditors’ council, we have received approval from four members of the council, while one member voted against this financial arrangement. That was the representative of Sberbank. But, I still want them to take part in this financing arrangement,” Ramljak added.
“The first amount of 100 million euros should, as expected, be paid to the company at the beginning of next week and that amount will be used to finance inventories, prepare for the tourist season, and pay delayed obligations incurred after the 10th of April, 2017. Importantly, 150 million euros will be given to suppliers for an old debt which was incurred before the 10th of April” Ramljak concluded.
