Since the government has assumed responsibility for the company’s management, the state should guarantee the company’s debt as well, says Sberbank’s CEO.
A new battle in the financial and credit war between Russian and Western banks around Agrokor started on Friday. Hopefully, it will not bring about the collapse of the biggest Croatian group and its affiliated companies. German Gref, the CEO of Russian Sberbank, said his bank would not continue lending to Agrokor until a necessary agreement is reached with the Croatian government, reports Jutarnji List on May 27, 2017.
“Since the government has assumed responsibility for managing the company, then it should also take responsibility for its debt. Let the government issue state guarantees for that debt. If they are not ready to do it, then they should return the company to the market. You should not adopt laws depriving the creditors of their rights,” said Gref, adding that he had talked with Agrokor’s biggest creditors and that everyone was confused about the situation. Gref also said that the government-appointed commissioner in Agrokor Ante Ramljak was incompetent.
According to unofficial information, Western-owned banks are ready to provide Agrokor new loans amounting to 250 million euros, but under the condition that old loans of the same amount should receive a priority repayment status. According to the Lex Agrokor, the priority in payment, if the groups go bankrupt, will only have those loans issued to Agrokor after 10 April this year, when the Lex Agrokor came into force.
However, Sberbank and VTB Bank, both Russian state-owned banks, demand that their latest loan worth 100 million euros should also have the priority status, the same as the loans issued after 10 April. Agrokor’s commissioner has refused such a demand, claiming that the decision could be made only by the permanent creditors’ council, which will be formed in July or August.
According to unofficial information, Western banks also insist that their existing loans should receive senior status. Sberbank, therefore, opted for a hostile attitude and to put Commissioner Ramljak and Prime Minister Andrej Plenković in a difficult situation, since they must hold a meeting next week (maybe as early as Monday) with Russian and Western banks regarding the new loan. It is obvious that Western and Russian creditors and investors are seeking amendments to the Lex Agrokor, or at least an agreement with the temporary council of creditors, although such a major deal can only be made by the permanent council of creditors, which will not be formed for months.
Thus, the Agrokor crisis enters into a very delicate period, one of the key weeks in which the group’s fate will be decided. If Agrokor’s new loan is not agreed within the next ten days, the company will not have enough money to pay its new obligations toward the suppliers and the whole group could go bankrupt. Even a delay in getting the loan could bring Agrokor down, since its major companies, such as Konzum, would not be able to prepare in time for the tourist season.
