ZAGREB, July 5 (Reuters) - Indebted Croatian food group Agrokor has completed a loan deal agreed last month and will now turn to improving profitability for the benefit of creditors, its crisis manager Ante Ramljak said on Wednesday.
“With this day we’re out of the survival period. We have saved the company and there will be no bankruptcy. Now we are entering the next phase which will focus on restructuring and an effort to improve profitability. This second phase will last until final settlement among creditors,” Ramljak told reporters.
He said that some 20 local and foreign banks and other financial institutions participated in the loan worth 480 million euros ($544 million), giving a boost to Ramljak’s bid to stabilise the Balkans’ biggest private sector employer.
“The effort to boost earnings and profits will bring benefits in terms of higher return to those who have claims towards Agrokor,” Ramljak said.
Agrokor earlier said the 15-month loan had an interest rate of 4 percent annually and could be extended to 24 months, and was agreed under a so-called “roll-up” arrangement, meaning that on maturity, Agrokor will settle some of its other debts with the lenders at the same time as repaying the loan.
Agrokor, which has around 60,000 employees, was put under state management in early April after it built up debts that amounted to at least 40.4 billion kuna ($6.2 billion) at the end of March. The company racked up debts during a rapid expansion, notably in Croatia, Slovenia, Bosnia and Serbia.
The state management in Agrokor is envisaged to last up to 15 months. ($1 = 0.8825 euros) ($1 = 6.5404 kuna) (Reporting by Igor Ilic, editing by David Evans)