Economy Minister, Darko Horvat, appeared in N1 television's morning programme Novi Dan, and commented on the indebted food and retail group Agrokor.

One of the countries’s largest companies which employed some 60,000 people across the region before its crisis started, was on the verge of bankruptcy in early 2017. Following the passing of a special law in April 2017, Agrokor was then taken over by state-appointed emergency administration, which spent 14 months stabilising the company and getting its creditors to agree to a debt-for-equity settlement plan.

The final deal will be put to vote in a court hearing on July 4, only six days before the legally-mandated term of the emergency administration is set to expire.

The Agrokor settlement is now in its final stage. Are there still any actors involved who dispute with the plan?

“I wouldn’t call it disputing as such, but there are some who are not satisfied with it. One of the biggest of those is Adris. We expect to sit down with them and see if we can come up with a solution, so that they too come to the court hearing in July.”

(Agrokor’s largest single non-banking creditor, Adris – which owns a portofolio of companies involved in tourism, food, and insurance – has a debt claim of about 1 billion kuna (€135 million), and has failed to agree terms of its debt recovery with the emergency management.)

Adris says that Agrokor’s shareholders from other countries have been treated favourably compared to shareholders in Croatia who have been short-changed in the settlement. Can this be used as grounds to dispute the settlement?

“Adris, if it continues to be unhappy with the plan, will go for a proceeding that might attempt to give them back what they think belongs to them. We are in talks with Adris, and we wish to reach a deal with them by July 4. It cannot happen as part of the settlement. I hereby invite Adris to come to the table again so that we can come to an agreement.

This ownership structure was not imposed by the government or the emergency administration, but by Agrokor’s former owner. As a minister and a business owner, it is strange to me that at one point Agrokor’s suppliers started financing the company. That was a risk they took, the consequences are now clear for all to see, and that is the main reason why they can’t expect a 100 percent debt recovery.

I don’t think Croatian suppliers would turn their back on Konzum (retail chain) or Agrokor. During the restructuring process, great care was taken to protect the most vulnerable of them, as well as Croatian suppliers. The settlement plan guarantees that their goods will remain on Konzum’s shelves for the next five years. I think the great majority of those who took part in the settlement will be pleased. Those who aren’t can ask for their rights by filing appeals in court.”

It is still uncertain whether bondholders would agree to the settlement. Do you expect any issues there?

“I don’t expect any problems… And even without the bondholders, the settlement could be voted in anyway.”

Russian banks, on account of getting ownership stakes at Agrokor, could help Agrokor enter the Russian market. Is there any information on whether Agrokor could seize on the huge potential of the Russian market?

“I would be happy if Sberbank helped open the Russian market for Agrokor. I would also like to tell the public that all the concession contracts (for plots of land) held by Agrokor will now be inherited by its shareholders, and there will be no sales of Croatian land. Agrokor will continue to lease these concessions until their normal expiry date, and will have the same rights as it had before April 10 last year (when emergency administration took over). And the ministry will have the final say if anyone wishes to change these contracts. However, I see no reason why they wouldn’t continue as they are, provided that all the provisions in concession contracts are honoured,” Horvat said.

(Companies which are part of the Agrokor group are one of the largest land operators in the country, leasing long-term concessions to some 81,500 acres of state-owned land.)

(€1 = 7.37 kuna)

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