Sberbank Asks Court to Ban Roll-Up Loans for Agrokor

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The Russian state-owned bank believes that such a model is not supported by Croatian regulations and is against the provisions of “Lex Agrokor”.

On Thursday, Sberbank Russia announced that it had filed a motion with the Commercial Court in Zagreb to ban Agrokor and Ante Ramljak, the government-appointed Commissioner from concluding new financing contracts which would include the so-called roll-up model, reports on June 8, 2017.

On 7 June, Sberbank Russia filed a motion with the Commercial Court in Zagreb to ban the Agrokor group and the extraordinary Commissioner from concluding new financing contracts which would involve the roll-up model. Such agreements would allow new creditors to receive the so-called super senior rights for their claims created before 10 April, the bank said in a statement.

We believe that such a model is not supported by Croatian regulations and is contrary to Lex Agrokor and that its implementation would result in the management of Agrokor’s assets, which would be harmful to other creditors and stakeholders, including the Republic of Croatia as a whole, said Sberbank.

The bank also added that, despite the current challenging circumstances, it wanted to ensure that Agrokor’s extraordinary administration process was in full compliance with the laws and was to the maximum benefit of all involved parties.

The largest Russian state-owned bank Sberbank is the biggest creditor of Agrokor, with more than a billion euros worth of loans. Maksim Poletaev, one of Sberbank’s chief managers, visited Zagreb in May and met with Prime Minister Plenković. The Prime Minister described the conversation as “excellent” and said there were no open questions. However, Poletaev later stated in an interview that Sberbank did not intend to continue providing loans to Agrokor.

Sberbank had previously asked that its loan, worth 100 million euros, which was given to Agrokor in March this year should also receive preferential treatment. At the time, government-appointed commissioner Ramljak told them that this was not possible due to “Lex Agrokor”, which allows such a possibility only for newly-issued loans.

However, now that Agrokor needs money to resume operations, Ramljak has offered “roll up” to all creditors, which means that, for each euro of newly-provided loans, one euro of their previously issued loans would also receive preferential treatment.

Agrokor’s creditors now also include venture capital funds which have bought debts at lower prices, and making money from distressed companies is their primary business. If they now decide to further finance Agrokor, according to the Ramljak’s new offer, that could reduce the amount of money that the Russian bank will eventually be able to get on the basis of its previously issued loans. That is why the Russians are angry, and if they decide to file lawsuits and succeed in proving that Ramljak’s actions have damaged their financial interests, the compensation could be paid by Croatian taxpayers.


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