Ten days ago, a secret late-night meeting was held by highest government officials to discuss dire situation in Agrokor, Croatia’s largest privately-owned company.
On Sunday, 5 March, a secret late-night meeting was held about the business future of Agrokor, Croatia’s largest privately-owned company. The meeting was attended by Agrokor’s owner Ivica Todorić, his Chief Financial Officer Ivan Crnjac, Prime Minister Andrej Plenković, Speaker of Parliament Božo Petrov, Finance Minister Zdravko Marić, and Deputy Prime Minister and Economy Minister Martina Dalić, reports Index.hr on March 15, 2017.
The meeting was held at the government headquarters after dramatic party consultations at HDZ which they allegedly made two important policy decisions. The first decision is that the state cannot use public funds to save Agrokor, and the second is that Ivica Todorić has to leave as head of the company because things are getting out of control and there is a threat of collapse due to over-indebtedness.
At the meeting, Speaker of Parliament and MOST leader Božo Petrov was the only one who proposed that the possible collapse and takeover of Agrokor could be prevented by the state. His idea was dismissed, and the meeting allegedly ended without any specific conclusions. Todorić, who is Croatia’s richest man, was reportedly angry and he threatened the government with consequences, including a huge decline of GDP.
Two international credit rating agencies, Moody’s and S&P, have in recent weeks downgraded the company’s credit rating. The media has for months been reporting about huge financial problems for Agrokor, due to its aggressive growth and expansion since the mid-1990s.
Late on Tuesday, the government issued a statement saying that it was “monitoring situation in Agrokor due to its importance for the Croatian economy”. “We have been informed about the downgrade of Agrokor’s credit rating and we have repeatedly emphasized the responsibility of the owners and management for the overall business results of the company. In this context, there was a meeting of representatives of the government, Parliament and Agrokor”, said the statement.
“Partners in government recognize the importance of Agrokor for the Croatian economy, its many suppliers, partners and employees. We have been informed that the company is making an effort and is considering different options for the stabilization of its business. We want it to succeed and we will follow the situation closely”, concluded the government in the statement.
Although all the details about the meeting are not known, it is not difficult to guess what Todorić discussed with Plenković and his ministers. A few weeks ago, Debtwire, a website which covers debts of companies, published estimates of unnamed Agrokor creditors who said that Todorić’s company owed the state about 800 million euros in unpaid VAT, while it had just 300 million euros of money in hand. Creditors fear whether Agrokor will have enough money to service its obligations.
When unconfirmed reports about delays in payment of wages in the company are taken into account, it is clear that the first creditor that could freeze Todorić’s bank account is the state itself, or rather the Ministry of Finance which is currently led by Zdravko Marić, who was Todorić’s employee until early last year. The company employs about 40,000 people in Croatia, and additional 20,000 people in other countries.
Todorić has repeatedly missed the chance to save himself and his company – either by selling some of the companies he owns, or by launching an initial public offering of shares to raise capital.
Reports published by N1 on Wednesday morning claim that the government has recently also met with representatives of Russian bank Sberbank, which is one of major creditors of Agrokor.
