The crisis in Agrokor does not seem to be subsiding.
It seems that the crisis in Agrokor, Croatia’s largest privately-owned company, is not subsiding. Standard&Poor’s credit rating agency recently downgraded Agrokor’s credit rating once again because it did not pay the coupon for its 300 million euro bonds which mature in 2019, reports 24sata.hr on May 10, 2017.
According to SEEbiz, Agrokor cannot pay the coupon within the next month either, and probably won’t be able to even in the next 12 months. Experts say that at this time, Agrokor needs a financial injection of at least 400 million euros. There are also rumours that Coca-Cola does not want to deliver its goods to Agrokor’s stores without advance payment.
Prime Minister Andrej Plenković commented on the situation in Agrokor. “We are in contact with government-appointed commissioner Ramljak and we want to make sure that the process is sustainable and that the restructuring is carried out on time. All important issues have been regulated by law, and as far as fresh liquidity and trust of creditors is concerned, I am sure that will continue. We know what direction we’re going in and how we can send a message of confidence,” said the Prime Minister.
The Minister of Economy and Deputy Prime Minister Martina Dalić also commented on the issue. “The credit rating decision actually confirms what we saw on 10 April, and that is that the company management led by Ivica Todorić had led Agrokor to bankruptcy. That once again confirms that all those accusations at the expense of the government, that it is protecting Todorić and his family, are incorrect. On the contrary, Ivica Todorić has brought Agrokor to bankruptcy, and the extraordinary management team is working to stabilise the Croatian economy and protect its stability, because the bankruptcy of Agrokor and its 73 companies would leave more than 30,000 people in Croatia without jobs and jeopardise more than 150,000 jobs at Agrokor’s suppliers,” Dalić said.
She noted that the next step was not the bankruptcy of Agrokor. “What the credit rating agency reported is an acceptance of the facts which took place during the management of Todorić and due to his request to launch the extraordinary management procedure. According to the constitutional provision that ownership cannot be brought into question, Todorić is still the owner, but the extraordinary commissioner has assumed all the functions of ownership, including the authorities of the company assembly and the board of directors, and Todorić cannot exercise any of the ownership functions in any way,” Dalić said.
She noted that the extraordinary management team was negotiating with various creditors, banks, funds and other parties interested in providing loans in the amount of 400 million euros. “I believe that this will soon deliver results and provide funds for normalising business operations and debt repayment,” Dalić said. She reiterated that the entire process would not fall to the taxpayer’s expense. “This is not even formally possible, and the government’s goal is to continue with policies which will further lower the budget deficit,” the Deputy Prime Minister said.
