June 5, 2017 / 12:01 PM / 6 months ago

Russia's VTB to propose changing Agrokor shareholder structure

ST PETERSBURG, Russia, June 5 (Reuters) - Russian bank VTB will propose changing the shareholding structure of indebted Croatian food producer and retailer Agrokor under a debt restructuring plan being prepared by creditors, a VTB executive told Reuters.

VTB is one of the biggest creditors of Agrokor, which was put under state management in April after it built up debts of at least 40.4 billion kuna ($6.2 bln).

Owned by Croatian businessman Ivica Todoric, the company is the biggest employer in the Balkans with 60,000 employees.

“Lenders are currently working on a plan which would be put to banks, a wider number of lenders, Eurobond holders. The debt should be restructured, commissions for servicing it lowered and the company should start full operation,” Yuri Soloviev, VTB first deputy chief executive, told Reuters in an interview conducted on Friday.

Soloviev did not say when the plan would be put to other lenders or how the shareholder structure may change under the restructuring proposal. Creditors have until Friday to submit claims and proposals, after which the restructuring plan will be worked out.

Agrokor owes VTB around 300 million euros ($338 million) and owes Sberbank, Russia’s biggest lender, more than 1 billion euros. Soloviev said that Agrokor’s total debt to EBITDA was at around 5-5.5 when VTB decided to lend to the group.

The most recent official data shows Agrokor’s total debt at the end of last September was 45 billion kuna, six times the company’s equity.

Last month, Agrokor’s crisis manager Ante Ramljak said that the company’s debt was higher than previously disclosed.

“When we were deciding on the lending, the company’s financial metrics were much better, with the debt significantly smaller. We discovered certain inaccuracies in (Agrokor) accounts later, which, after my public comments (in March), led to an internal investigation in Agrokor,” Soloviev said.

Asked whether VTB would consider swapping its debt for Agrokor equity, Soloviev said: “This is an open question. Right now, no. The shareholders are the same and this, of course, should be changed during the restructuring,” Soloviev said.

Asked if the change in structure was something he would propose, he said: “Yes.”

Croatian Economy Minister Martina Dalic, on a visit to Russia last week, declined to comment on Agrokor. ($1 = 0.8876 euros, $1 = 6.5741 kuna) (Additional reporting by Igor Ilic in Zagreb; Editing by Susan Fenton)

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