Agrokor Signs Agreement with Banks

Total Croatia News

Agrokor’s suppliers will meet today with prime minister.

Ivica Todorić, CEO and majority owner of Agrokor, signed on Sunday the standstill agreement with banks, which should ensure normal business operations of the group in the coming period, but also launch the process of deep restructuring. The information was officially confirmed by Agrokor on Sunday evening, report Jutarnji List and Večernji List on April 3, 2017.

When it comes to other signatories of the standstill agreement, all six major banks involved have also signed the agreement. The banks in question are Sberbank, VTB, Zagrebačka Banka, PBZ, Erste Bank and Raiffeisen Bank. They have confirmed that the agreement “was officially signed by all the parties involved,” including Agrokor, and that it came into force. Major banks also want to include smaller banks and other financial institution in the agreement, so on Sunday evening they met with their representatives. “The reactions are very positive. It is expected that in the next few days smaller banks and other institutions will sign the arrangement,” said a bank representative.

Next to join the agreement are major suppliers, to whom Agrokor owes about 16 billion kuna. Only when they also join the agreement will the final solution for the Agrokor crisis be found and a sizable financial injection given to the company to be able to operate normally. The negotiations should also be joined by smaller suppliers. For many of them, their dependence on Agrokor is much larger than that of large suppliers.

For example, the Kanaan company which produces snacks is owed by Agrokor some 140,000 kuna. Its owner Zvonko Popović is angry because smaller suppliers who are the most affected by the Agrokor crisis are being involved in the discussions at the very end of the process. “The government talks all the time about small and medium enterprises and how important they are, but is actually concerned only with large companies”, said Popović.

The Government announced that on Monday morning suppliers will meet with Prime Minister Andrej Plenković, Economy Minister Martina Dalić, and Agriculture Minister Tomislav Tolušić.

Whatever ultimately is the solution for the debt-ridden Agrokor, economists warn that the crisis will be felt by the whole Croatian economy. The importance of the Agrokor group for the Croatian economy is ten times greater than what Parmalat or the automotive industry had on western economies, according to Željko Lovrinčević from the Zagreb Institute of Economics. “This is an unprecedented case. There has never been a country in Europe which had a company with such importance for the whole economy,” said Lovrinčević.

According to media reports, the chief restructuring officer who will lead the restructuring process of Agrokor will be Antonio Alvarez. He is the executive director for restructuring in Europe at the Alvarez&Marsal consultancy, which Russia’s Sberbank some time ago hired in order to analyze Agrokor. In addition to Alvarez, the team will reportedly also include consultants from McKinsey and Deloitte, companies which are also already present in Agrokor.


Subscribe to our newsletter

the fields marked with * are required
Email: *
First name:
Last name:
Gender: Male Female
Please don't insert text in the box below!

Leave a Comment