ZAGREB, April 6 The financial problems that have
hit Croatia's largest food concern, Agrokor, will
almost certainly have an impact on the country's gross domestic
product, the central bank governor said on Thursday.
Agrokor, the biggest food producer and retailer in the
Balkans with 60,000 employees, and its main creditors have hired
foreign restructuring experts led by consultants Alvarez &
Marsal to rescue it after it built up debts of about 45 billion
kuna ($6.4 billion) - or six times its equity - during its
"The crisis in Agrokor will almost certainly have
consequences on GDP," Boris Vujcic said in an interview for the
Vecernji List daily.
"The (negative) effects could be particularly pronounced if
we witness a disorderly way out of this situation. If the whole
process gets well managed and coordinated, the consequences for
GDP could be much milder," he said.
The consultants said on Wednesday the first task was to
secure liquidity for Agrokor and that it was in talks with a
potential creditor. Local media reported that a cash injection
could amount to some 300 million euros ($319.4 million).
"We still don't know the details of (Agrokor's)
restructuring process, so we can't calculate what exactly the
effect on GDP could be," governor Vujcic said.
Croatia, the youngest member of the European Union, suffered
six years of recession from 2009 to 2014 that wiped out more
than 12 percent of its overall output, and has started
recovering in the last two years.
The government is hoping for economic growth of 3.2 percent
this year after a 2.9 percent expansion in 2016. Croatia needs
to register faster growth to help raise funds worth almost 3.5
percent of GDP just to pay the interest on its public debt.
($1 = 7.0039 kuna, 0.9394 euro)
(Reporting by Igor Ilic; Editing by Hugh Lawson)