June 8, 2018 / 1:00 PM / 12 days ago

Agrokor estimates its value for creditors as $2.9 bln

ZAGREB, June 8 (Reuters) - Agrokor will be worth around 2.5 billion euros ($2.9 billion) after a rescue deal that will see creditors take control of the indebted Croatian food and retail group, the company estimated on Friday.

That is less than a third of the 58 billion kuna ($9.2 billion) of debts racked up by the business.

Agrokor, the largest company in the Balkans with 60,000 staff, was put under state-run administration in April 2017, crippled by debts built up during an ambitious expansion drive.

Its creditors, which include foreign and local banks, bondholders and suppliers, are in settlement talks which seem likely to be completed by the end of the next week.

“At the end of the next week the settlement agreement is expected to be ready to go to the commercial court for approval,” a company source said.

Russia’s Sberbank is Agrokor’s biggest single creditor, with loans are worth 1.1 billion euros.

It is expected to become the largest single shareholder after the settlement with a stake - together with that of fellow Russian bank VTB - of about 45 percent of the new Agrokor holding.

According to an emergency law adopted in April last year, the settlement must be confirmed by July 10 for Agrokor to avoid bankruptcy, which would make the debt recovery impossible or much lower for most creditors. Two thirds of the creditors must vote for the settlement deal to make it valid.

The idea is to create a new holding that would take over some sustainable debts. Creditors will swap part of the debt for equity and there will be a certain level of write-offs.

Banks and bondholders are likely to become the major shareholders as local suppliers have already been repaid a considerable portion of their claims.

($1 = 0.8510 euros)

$1 = 6.2840 kuna Reporting by Igor Ilic; Editing by Mark Potter

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