ZAGREB, April 3 Domestic suppliers owed some 16
billion kuna ($2.29 billion) by Croatia's Agrokor
have asked the government to facilitate the unfreezing of the
indebted food producer and distributor's accounts.
Agrokor is the biggest Croatian private firm and the largest
employer in the Balkans with some 60,000 workers. It operates
largely in Croatia, Bosnia, Slovenia and Serbia and during its
rapid expansion it built up debts of about 45 billion kuna, or
six times its equity.
A group of local suppliers owed funds by Agrokor's retail
chain met with Croatia's prime minister on Monday. Accounts of
some of the companies owned by Agrokor have been frozen due to
unpaid obligations towards suppliers and the state, including
Agrokor and six banks on Sunday signed a repayment freeze
agreement which is aimed at injecting fresh liquidity into the
company and imposing new management whose task will be
restructuring its debt and overall business.
"We support the standstill agreement, but to join it we've
yet to define some details (with the banks). Still, we think we
need a faster (institutional) framework to resolve Agrokor's
account freeze and guarantee future payments to suppliers," said
Josip Budimir from the coffee producer Franck on behalf of
The government has proposed a law to shield the economy from
the failure of large companies which is expected to be approved
by parliament later this week.
Budimir said he believed the law could help suppliers secure
their financial demands.
"I do expect to see concrete moves after today's meeting,"
said Denis Matijevic of Agrofructus, one of Agrokor's suppliers.
"It is always good to have the state as mediator, but it should
not interfere directly."
Agrokor's creditors include Russia's Sberbank and
VTB Bank as well as the Croatian units of Austria's
Erste Bank and Raiffeisenbank.
Other creditors include Privredna Banka Zagreb, owned by
Italy's Intesa Sanpaolo, and Zagrebacka banka, owned by
The standstill deal signed between Agrokor management and
creditors envisages appointment of a chief restructuring officer
and independent experts to fill top management roles.
Analysts believe that Agrokor's restructuring, which is
expected to take months, is likely to lead eventually towards
the sale of some assets.
"Also, some jobs may disappear, but what matters now is to
keep confidence among all the stakeholders, without any
individual or uncoordinated actions. Agrokor will not suffer
because of lack of money, but may suffer because of lack of
trust," said business consultant Milan Racic.
($1 = 6.9787 kuna)
(Reporting by Igor Ilic; editing by Ivana Sekularac and Jason