ZAGREB, May 22 (Reuters) - Local suppliers of Croatia's Agrokor said on Monday they would halt deliveries at the end of May to the indebted food and retail giant unless some debts were repaid and other cash due to them was treated as a priority for repayment.
Suppliers made a similar threat to halt deliveries in April, just before Agrokor was put under state control after struggling to repay debts built up during a rapid expansion of its business, notably in Croatia, Slovenia, Bosnia and Serbia.
Agrokor, the biggest food producer and retailer in the Balkans with some 60,000 employees, built up debts that amounted to 40.4 billion kuna ($6.11 billion) at the end of March, the company said in a bourse filing this month.
The state appointed Ante Ramljak as crisis manager on April 10 to steer the restructuring process in the next 15 months.
"We urge the crisis manager to agree as soon as possible new borrowing and to repay part of the old debts towards suppliers dating before the crisis management was appointed," the suppliers said in a statement after they met on Monday.
The group of suppliers said deliveries would stop if demands were not met by May 29.
Such a move would particularly hit Agrokor's Croatian retail chain, Konzum, whose business operations and cash flow depend on regular supplies during the summer tourist season.
Agrokor did not have an immediate comment.
The suppliers also demanded that Agrokor's debts resulting from goods delivered after April 10 be treated as having a senior status, giving them the same priority for repayment as cash injections from banks used to stabilise Agrokor.
Agrokor is talking to banks and other investors to secure a new cash injection expected to be worth up to 350 million euros ($393.26 million) to run the business during restructuring.
Agrokor had said it aimed to strike a deal for the new cash injection by the end of May after securing an initial injection worth 80 million euros in mid-April.
The suppliers also demanded a resolution to a row with local banks about how to treat cash payments received via Agrokor's promissory notes.
Agrokor issued promissory notes to suppliers that they could cash in at banks. But the notes said banks could demand the cash be returned by suppliers if the banks were not paid by Agrokor.
The banks, which have yet to receive the Agrokor payments, have been pursuing suppliers for the cash.
"We want that all the debt based on promissory notes be treated as Agrokor's debt," the suppliers said.
($1 = 6.6113 kuna)
Editing by Edmund Blair