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Croatia approves law to protect economy from Agrokor-like crisis
April 6, 2017 / 11:50 AM / 8 months ago

Croatia approves law to protect economy from Agrokor-like crisis

ZAGREB, April 6 (Reuters) - Croatia’s lawmakers adopted on Thursday an emergency law aimed at protecting the economy from big company failures after the country’s largest private firm Agrokor piled up large debts, leaving it struggling to pay creditors and suppliers.

The centre-right majority approved the law, which will be implemented if Agrokor fails to reach a deal with banks and suppliers on a cash injection and restructuring. The law was criticised by opposition politicians who said it would threaten small suppliers and the state budget.

Under the law, devised to deal with potential financial troubles in a company with at least 5,000 employees and debt of 1 billion euros ($1.07 billion), the state will be able to appoint an executive to steer a restructuring process at the request of a debtor or at creditors’ request with the company’s agreement.

The law envisages a company reaching a restructuring deal within 15 months.

Agrokor is the biggest food producer and retailer in the Balkans with some 60,000 employees. It accumulated debts of about 45 billion kuna ($6.43 billion), or six times its equity, as it expanded rapidly, notably in Croatia, Serbia, Slovenia and Bosnia.

Reporting by Igor Ilic; editing by Susan Thomas

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