Prime Minister meets with Agrokor’s creditors.
Croatian Parliament adopted yesterday by a majority vote, with 83 votes “for”, 46 “against” and two abstentions, the Law on the procedure of extraordinary administration in companies of systemic importance for the Republic of Croatia, the so-called “Lex Agrokor”. The law allows for the procedure of extraordinary administration in companies whose liabilities amount to more than 7.5 billion kuna and which have more than 5,000 employees, reports Večernji List on April 7, 2017.
The law was somewhat changed shortly before the final vote. The main change allows for the creditor which, after the activation of the law, provides further loans to the company, to have a priority in repayment, including in possible bankruptcy proceedings if the process of extraordinary administration fails.
SDP criticized the proposal. “The amendment gives to Russian banks absolute priority in settlement of their claims. This means that they will be able to provide additional funding to Agrokor without any economic risk because they will have absolute primacy of settlement, even if the process of extraordinary administration fails and Agrokor goes bankrupt. This means that this amendment transforms Croatia into a colony of Russian financial interests,” said Peđa Grbin (SDP).
SDP president Davor Bernardić said that the amendment showed that the government itself did not believe the process would succeed. “This is a status which no one has ever had in Croatia. You are trying to seize Croatian forests, fields, farms, water sources and take away part of the sovereignty of Croatia,” said Bernardić.
Ivan Vrdoljak (HNS) said that his party would not support the law which he said ignored the needs of suppliers, both small and large. “As much as you have promised that citizens will not pay a single kuna from the budget for someone else’s debts, this law opens the doors for Croatian citizens to pay for lawsuits and arbitration proceedings,” said Vrdoljak.
Branko Bačić (HDZ) reacted to accusations. “The aim of this law is to stabilize and continue to operate a systemically important company, whose bankruptcy would undermine financial stability of the country,” said Bačić. “You are talking about forests, fields, water resources… Do you know what the current Agrokor’s obligations are? Five billion euros. Without this law, creditors would be paid from the assets of the debtor,” said Bačić, accusing Bernardić of provoking panic. “It is not acceptable to say thing which I am sure you know are misleading,” said Bačić.
After the law was adopted, Prime Minister Andrej Plenković met on Thursday evening with representatives of Agrokor’s main creditors, Sberbank, VTB Bank, Erste&Steiermarkische Bank, Raiffeisenbank, Privredna Banka Zagreb and Zagrebačka Banka.
He informed them about the adopted law and with the efforts undertaken by the government in relation with financial difficulties in Agrokor, in order to safeguard the economic and financial stability of Croatia. Representatives of the banks welcomed the adoption of the law and expressed their readiness to provide liquidity to the company and its suppliers.
The law has entered into force at midnight, and its provisions might be activated as early as today.
