Agrokor’s Commissioner Ante Ramljak says that the company is now certain to avoid bankruptcy.
Agrokor has managed to agree on the financial structure of a special form of financing, which will bring the group about 400 million euros of fresh money to pay debts and current liabilities. Government-appointed extraordinary commissioner Ante Ramljak has confirmed that the loan has been agreed and that 20 financial institutions and banks will be involved, reports Večernji List on 6 July 2017.
The turnaround occurred among Russian creditors because the smaller Russian VTB bank, which has already provided Agrokor with about 300 million euros in loans, now intends to participate in the roll-up arrangement, while Sberbank, which gave 1.1 billion euros to Agrokor and was the biggest opponent of the new roll-up loans, has changed its tactics and is still considering whether or not to provide an additional sum of 110 million euros.
The Russians have changed their position after other Agrokor creditors did not join them in their boycott of the roll-up loan, but also under the pressure of the Commercial Court’s decision that the roll-up is not illegal, which hindered their ability to win in any potential lawsuit against the extraordinary administration.
While a few days ago Sberbank categorically claimed they would not participate in the roll-up loan, yesterday they said that the option was being considered. The extraordinary administration has given them ten days to decide whether to use their 110 million euros quota or give it to Zagrebačka Banka and the US investment fund Knighthead Capital Management. In addition to Zagrebačka Banka, Erste Bank and Raiffeisen Bank will also participate in the financing, so the 160 million euros quota reserved for Croatian banks has been met.
Ramljak argues that Agrokor will not use the full amount available to it, but that current obligations will be paid from business revenues. According to the data presented by Ramljak to the provisional creditor council, Agrokor’s businesses are doing better than last year. For example, in the first five months, Ledo and Jamnica have been doing better than in the first five months of 2016, with revenues and net profits rising. Konzum’s turnover fell by around 10.8 percent, but the loss is 10 million kunas less than in the same period of 2016.
“We have survived, there will be no bankruptcy, and are we moving to the second phase, which is the restructuring of the company. This second phase of restructuring is a struggle for profit, to increase the company’s revenues, which will ultimately mean a higher share of debts which will be repaid to creditors,” said Ramljak.
Big and small suppliers will be settled out of the new loan. The priority will be given to small family farms to which Agrokor owes about 36 million euros. There are also 120 million euros for larger suppliers, who are in the process of negotiating the criteria for payment of the money. One of the basic criteria will be that the vendors agree to the same terms regarding the future supply of the retail chain.