Creditors of indebted Croatian food group Agrokor have agreed draft settlement terms aimed at saving the company from bankruptcy, Prime Minister Andrej Plenkovic said on Tuesday.
The creditors, including foreign and local banks, bondholders and suppliers, will vote on the deal before July 10, the legal deadline for avoiding bankruptcy.
"I am happy to say that a settlement process has been completed," Plenkovic told reporters after meeting creditors. "We now have three months to finalise the text of the settlement."
Administration Process
Agrokor, the biggest employer in the Balkans, was put under state-run administration a year ago after an overly-ambitious expansion drive left it weighed down by borrowings. .
Russia's Sberbank is Agrokor's single biggest creditor with a 1.1 billion euros ($1.4 billion) claim. Overall debt claims against the company amount to 58 billion kuna ($9.7 billion).
"The settlement will help Agrokor return to normal business," deputy prime minister and economic minister, Martina Delic, told reporters.
"The systematic risk for the economy is now removed," she said.
Ownership Structure
Sberbank could get around 30 percent of Agrokor following a debt settlement, a Croatian newspaper reported on Saturday.
Agrokor crisis manager Fabris Perusko said: "Sberbank is the biggest creditor and that will be key to its future position and the future ownership structure, which will be known in May."
Agrokor said in January that it is seeking to achieve a fast, simple and efficient ownership transfer, and to exit the extraordinary administration procedure within 12 months.
Last year, the company revealed that it owed around €5.5 billion in third party debt, to more than 5,700 Croatian and international creditors including banks, investment funds and suppliers.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.
