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Agrokor denies reports of electricity outages after bonds drop
February 24, 2017 / 1:16 PM / 7 months ago

Agrokor denies reports of electricity outages after bonds drop

LONDON, Feb 24 (IFR) - Agrokor said reports of electricity outages at its Mercator stores are not correct, after stories in local press sent the Croatian company’s bond prices tumbling on Friday.

Insajder.net reported on Thursday afternoon that electricity at several Mercator stores in Serbia had been switched off, attributing the outages to unpaid rent and electricity bills to a local landlord.

A spokesman for the food producer and retailer told IFR on Friday that the story was inaccurate, however.

“The information about Agrokor’s Mercator stores in Serbia being without electricity is not correct. They are operating under regular conditions,” he said.

Agrokor’s bonds sold-off sharply earlier on Friday morning, which investors attributed to an English language version of the story that appeared on website POST Online Media.

Its €325m 9.125% 2020 senior unsecured note dropped more than six points to a cash price bid of just 71.625, according to Tradeweb. This equates to a yield of around 23%.

Debt at Croatia’s largest private company has plummeted in value in recent weeks on concerns around the company’s finances, with a holding company PIK note falling to as low as 25 cents.

Moody’s changed the outlook on Agrokor’s B3 credit rating from stable to negative on Friday, reflecting the “uncertainties weighing on its credit profile”.

The changed outlook came after the ratings agency described Agrokor’s accounting as “opaque in certain areas” in a report published last week.

IFR reported earlier this month that investors were also concerned around the company’s accounting policies, particularly the way Agrokor accounts for investments at subsidiaries in its cashflow statement. (Reporting by Robert Smith)

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