Croatia’s neighbours join forces over Agrokor

Croatia’s neighbours join forces over Agrokor
By bne IntelliNews April 19, 2017

Officials from Bosnia & Herzegovina, Montenegro, Serbia and Slovenia formed a joint ministerial team in response to the debt crisis at Croatian conglomerate Agrokor at a meeting in Belgrade on April 19. 

Agrokor is one of the largest employers and suppliers in the region, and its current instability has raised concerns in all the countries where it operates. Their governments have been trying to find a common solution and prepare for a worst case scenario in case of a possible closure of Agrokor. 

The team will communicate daily to exchange information and undertake joint activities to preserve jobs, protect the interests of suppliers and ensure the stable operation of companies within Agrokor Group in each country, according to a Serbian government statement.

Serbian Prime Minister Aleksandar Vucic, Deputy Prime Minister Rasim Ljajic, Minister of Agriculture and Environmental Protection Branislav Nedimovic attended the meeting, alongside Bosnia’s Minister of Foreign Trade and Economic Relations Mirko Sarovic, Montenegrin Minister of Economy Dragica Sekulic and Slovenian Minister of Economic Development and Technology Zdravko Pocivalsek.

All the ministers are aware of the importance of Agrokor for economies in the region, the Serbian government said. 

While the Croatian government was not represented at the meeting, ministers from other countries expressed support for Zagreb’s efforts to stabilise the group’s operations in order to protect the interests of its employees and suppliers.

Officials from the four countries decided to monitor the financial and commodity flows of companies linked to Agrokor Group in accordance with local legislation. 

They also expressed readiness for talks with representatives of the Croatian government aimed at finding joint solutions for the stabilisation of Agrokor.

The Serbian government statement added that it expects the new management of Agrokor Group will appoint independent experts for a successful restructuring of the companies within the group, and that the new administration of the company will treat all suppliers - within and outside Croatia - equally.

Consultant Antonio Alvarez III has been appointed as Agrokor’s chief restructuring officer. This was followed by the Croatian government’s appointment of investment banker Ante Ramljak as emergency officer. Other independent experts are expected to be appointed to Agrokor’s board. 

Slovenia has already taken some steps to mitigate the consequences of the Agrokor crisis on its economy. The government adopted "Lex Mercator", a draft law intended to prevent the diversion of funds from systemically important companies, on April 13. Slovenian retailer Mercator is a subsidiary of Agrokor, and a major employer within the country. 

Agrokor is also active in Bosnia through its retailing unit Konzum while in Serbia it is the owner of retailer Mercator S and food production firms Dijamant, Frikom, Kikindski Mlin, MG Mivela and Nova sloga. In Montenegro it owns Mercator retailer as well.