ZAGREB, April 7 Local suppliers to Croatian food
producer and retailer Agrokor said on Friday they
would stop deliveries of almost all goods until the indebted
firm's liquidity crisis was resolved.
Agrokor, the biggest food producer and retailer in the
Balkans, accumulated debts of about 45 billion kuna ($6.43
billion), or six times its equity, during its expansion, notably
in Croatia, Serbia, Slovenia and Bosnia.
The company, which has some 60,000 employees, is now drained
of cash and many of its units have frozen accounts.
"We will stop supplying Agrokor from Saturday with all the
goods besides fresh bread," a group representing suppliers to
Agrokor said in a statement, adding supplies would not resume
until a deal on repayments was reached.
Agrokor struck a deal last Sunday with six lenders,
led by Russia's Sberbank and VTB, to freeze
debt repayments and to secure an unspecified cash injection
before restructuring the company's business.
The suppliers, including big producers and small family
farms, did not join that agreement as they feared their demands
for payment could be adversely affected by the restructuring.
Agrokor's retail chain Konzum controls around 30 percent of
the local market.
Fearing the wider economic impact from Agrokor's debt
issues, Croatia's parliament passed an emergency law on Thursday
that aims to protect the economy from any big company failures.
"We are now waiting for developments related to potential
activation of the law on big companies in trouble," the
suppliers said in the statement.
Under the law to deal with problems at firms with at least
5,000 employees and debts of 1 billion euros ($1.06 billion),
the state would be able to appoint an executive to steer
restructuring at the debtor's request or if asked by creditors
with the company's agreement.
Agrokor said on Friday it was studying the law's provisions.
($1 = 7.0010 kuna)
($1 = 0.9391 euros)
(Reporting by Igor Ilic; Editing by Edmund Blair)