Podravka to Further Expand in Russia or European Union

Total Croatia News

Before expected changes at the top of the company, Podravka wants to expand to new markets.

Podravka is preparing for an acquisition worth up to 300 million euros in Russia or the European Union, in order to reduce its exposure to uncertain markets of the Balkans, reports Index.hr on January 13, 2017.

That was announced in an interview with Bloomberg by Zvonimir Mršić, CEO of Podravka. He is a prominent member of SDP and there is speculation that the new government could soon initiate proceedings for his dismissal.

For the purpose of financing the acquisition, the company from Koprivnica has already received an approval from its shareholders for an capital increase by issuing 2.7 million new shares through the next four years. The remaining part will be financed by its own cash and with loans, including an arrangement with the European Bank for Reconstruction and Development worth 24 million euros.

“Our goal is to grow in the international markets, primarily through acquisitions. We have a number of targets and we expect to make acquisitions during 2017. The company wants to reduce its exposure in our region, which is the highest risk region among all in which we operate”, said Mršić. Their goal is to increase revenues in markets outside of the former Yugoslavia. They want the share to increase from the current 30 percent to 50 percent.

Due to tensions between the European Union and Russia, they have delayed acquisitions in the Russian market. “Podravka’s revenues in Russia grew by 50 percent in the first nine months of 2016 and we want to be recognized as a local producer. The ruble exchange rate helps us”, he concluded.

The media has speculated that the HDZ government will dismiss the current CEO and the whole board of directors at the shareholder’s assembly which will take place on 21 February. Before becoming head of Podravka, Mršić was SDP’s Mayor of Koprivnica. Although he was appointed as a political candidate, he is widely considered to be one of the most successful managers of companies which are in complete or partial state ownership.

The first step in his dismissal has already been taken. According to rumors, it has been agreed that new chairman of the Supervisory Board will be Luka Barilović from the Croatian Chamber of Economy, who is close to HDZ. It is expected that SDP’s representatives in the Supervisory Board – Mato Crkvenac and Ivo Družić – will be dismissed as well.


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