Indebted Croatian food group Agrokor will be taken over by a new Dutch-based company, owned by creditors, under a proposed debt settlement plan.
Agrokor, the largest company in the Balkans with 60,000 staff, was put under state-run administration in April 2017, crippled by debts built up during an ambitious expansion drive.
The draft debt settlement plan, drawn up by Agrokor's crisis management team, proposed that a company to be called Aisle Dutch TopCo would offer a debt-to-equity swap or convertible bonds to creditors.
The debt settlement deal would become effective next year after the appeals period expires, the team said.
The settlement must be voted on by July 10, according to an emergency law adopted a year ago to save Agrokor from bankruptcy.
Creditors including foreign and local banks, bondholders and suppliers, will start discussing the settlement plan this week.
'Fair And Equitable'
The plan aims for "fair and equitable treatment of the stakeholders in the restructuring process; establishment of a new corporate structure to hold Agrokor's assets; and achieving a sustainable level of debt in the new group by settling impaired creditors' claims with convertible bonds and depository receipts", the crisis management team said.
Agrokor said last week that a vast majority of creditors were behind efforts to finalise the deal. For the settlement to be valid two thirds of the creditors must vote for it.
After the settlement, Agrokor will be effectively left without any recoverable assets and will need to be wound down, the crisis management team said.
The biggest single creditor of Agrokor is Russia's Sberbank with loans worth 1.1 billion euros. It is set to become the biggest single shareholder in the new company after the settlement, which will also include a certain level of write-offs.
Croatia's deputy prime minister Martina Dalic resigned on May 14 under pressure from opposition groups who accused her of failing to prevent conflicts of interest during the restructuring of Agrokor.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
