Agrokor close to striking new loan deal

Agrokor close to striking new loan deal
By bne IntelliNews May 30, 2017

Troubled Croatian retail giant Agrokor is “just about to finalise a new loan”, the company’s extraordinary trustee Ante Ramljak told journalists on May 29 after meeting with Sberbank representatives and Croatian government officials. 

Agrokor is one of the largest employers and suppliers in the region, but was engulfed by a debt crisis earlier this year. Agrokor is estimated to owe a total of HRK16bn (€2.2bn) to its suppliers.

Agrokor has been holding talks on a potential fresh loan for weeks after emergency management managed to obtain the first cash injection of €80mn last month. A May 29 statement from Agrokor did not specify the size of the loan, but according to media reports Ramljak hopes to finalise about €350mn worth of fresh financing this week. 

“Certainly the most important information is that Agrokor is just about to finalise a new loan and that talks with potential creditors are in the final phase during which we generally arranged a framework and terms for a new loan,” Ramljak said according to the statement. 

At this time I can tell you that there are a number of interested creditors who will act together, and among them are some banks who already participated in securing the first loan arranged by the Extraordinary Administration. It is a very good sign that a significant number of creditors is participating in these talks…” 

At the May 29 meetings, Agrokor’s emergency management presented details of the restructuring process to the bankers. A decision from the Russian lender is expected soon, Ramljak said. 

Sberbank is Agrokor’s largest unsecured lender, with a total debt holding of HRK8.17bn as of end-March. 

The issue of providing a government guarantee for Agrokor’s debts to Sberbank was not raised, Croatian Prime Minister Andrej Plenkovic said on May 29, following the meeting.

“The meeting took place in a positive atmosphere with an exchange of opinions. [The participants] agreed that the common goal is to ensure a sustainable and successful business of the company as a prerequisite for job preservation and ultimately the collection of claims of all creditors,” a government statement said.

Agrokor’s bank debt payments are currently frozen due to a standstill agreement signed last month with its main lenders.

Another Russian lender, VTB, which is also one of Agrokor’s main creditors, will be patient as the company carries out its restructuring, Herbert Moos, CFO of VTB, said on May 15.

Meanwhile, the crisis is already threatening Agrokor’s business with some suppliers halting deliveries or insisting on advance payment. In the latest development, three suppliers from Bosnia & Herzegovina have halted deliveries to Agrokor’s Bosnian unit Konzum, Hina reported on May 30. 

Total liabilities of Agrokor Group’s 19 largest subsidiaries, including Agrokor itself as well as Konzum, Tisak, Frikom and Ledo, amounted to HRK40.4bn as of end-March. The latest debt figures published by the emergency management at Agrokor are not audited and they do not include Agrokor’s other smaller units.