| ZAGREB, April 5
ZAGREB, April 5 Croatia's parliament could pass
an emergency law as early as Wednesday to shield the economy
from big company failures after the country's largest private
firm Agrokor piled up debts, leaving it struggling to pay
creditors and suppliers.
Agrokor, the biggest food producer and retailer in the
Balkans with some 60,000 employees, built up debts of about 45
billion kuna ($6.5 bln), or six times its equity, as it expanded
"We want to protect our financial system, the economy, jobs,
suppliers, family businesses and all the stakeholders involved
in developments around our biggest firm," Prime Minister Andrej
Plenkovic told parliament as he presented the new law.
Under the law, which could be approved by parliament as soon
as Wednesday, the state will be able appoint an executive to
steer a restructuring process at the request of a debtor as well
as at creditors' request with the company's agreement.
The law envisages reaching a restructuring deal within 15
Agrokor struck a deal on Sunday with six lenders led by
Russia's Sberbank and VTB to freeze debt
repayments and get an unspecified cash injection.
In line with that, a restructuring expert was appointed to
rescue the business. Antonio Alvarez III, of consultants
Alvarez&Marsal, said on Tuesday there was no guarantee that the
company could be saved.
Agrokor suppliers, who are owed around 16 billion kuna
($2.29 billion), hope the new law will facilitate unfreezing of
the company's accounts.
But food producers that supply Agrokor's retail chain
Konzum, which controls almost one third of the local market, are
worried payments will come too late to keep their businesses
"We're still delivering products, but we have no information
whatsoever on how and when we will be paid," said Zvonimir Belic
whose tomato producer Zarja near the capital Zagreb employs some
50 people. "I really don't know how to pay salaries this month."
The central bank said on Tuesday some banks might need a
capital boost due to their exposure to Agrokor although the
banking system as a whole was not in danger due to high average
(Editing by Susan Thomas)