The newly appointed Economy Minister Darko Horvat said on Monday that he expects an agreement on the settlement with Agrokor's creditors to be reached by the legally mandated deadline of July 10, adding that the plan would be the only way creditors' losses could be reduced, and that there is no ideal win-win situation for Agrokor's problems.

“I am no prophet, but it makes sense to expect that a settlement would be agreed by July 10, because in that way (Agrokor’s) creditors’ losses would be minimal,” Horvat said in an interview for the state radio.

Asked if a settlement plan could be agreed without the consent of Agrokor’s suppliers, since the votes of 66 percent of creditors who hold Agrokor’s debt claims would be sufficient – i.e. if the deal could be agreed if Russian banks and a US hedge fund reached an agreement to that effect, Horvat said that this is a possibility. However, he added that the most important thing in the process is to be fair to suppliers.

“The key to the functioning of the company are creditors and suppliers, and the extent to which the settlement would enable them to recover what they had invested in Agrokor. There can be no ideal, win-win, outcome in the case of Agrokor, but if we ensure the company’s long-term stability, the losses of all stakeholders (affected) will be eventually recovered by Agrokor doing well in the market in the next few years,” Horvat said.

Commenting on the announcement by Prvo Plinarsko Drustvo (PPD) and INA that they would re-capitalise state-owned fertiliser producer Petrokemija with 150 million kuna (€20.3 million), Horvat said that giving up on Petrokemija would be a bad move both for the country and for the town of Kutina – where Petrokemija is based – as well as for the nation’s industry as a whole.

He welcomed the two companies’ interest, but also mentioned pension funds as possible parties involved in Petrokemija’s re-capitalisation. Horvat said that at the moment the state still did not have their 100 percent consent, but that talks were nearing completion.

“Petrokemija has a very good product, and almost 80 percent of its output is exported,” he said, adding that the price of mineral fertiliser on the European market had never been lower, and that the price of natural gas – needed for the company’s operation – had never been higher, which was causing problems for Petrokemija’s business.

“That means that even with the planned restructuring, which is set to be finally outlined by August 15, the government will still not be 100 percent sure that it has put Petrokemija where it wants it to be,” said Horvat.

Horvat added that Petrokemija would in the future have to change its production process, stop relying on government subsidies, and face market competition.

As for problems in the shipbuilding sector, he said that he expects government guarantees for new loans to the major shipyards of Uljanik and 3. Maj to be realised as soon as possible.

“There is room for Croatian shipyards, on the one hand, to cut their costs, and on the other, to start making different types of vessels. Vessels that will find their market much more easily, that will include more Croatian-made components, and can have a much higher added value than what they are making now,” said Horvat, adding that he expected loans for the two shipyards to be obtained by mid-July.

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