The oil company Ina and the Prvo Plinarsko Drustvo (PPD) gas supplier have signed on Wednesday an agreement with the state property management agency CERP for the re-capitalisation of the indebted state-owned Petrokemija fertiliser manufacturer.

The deal will see Ina and PPD invest 300 million kuna (€40.3 million) of fresh capital – 150 million (€20.1 million) each – of fresh capital for the Kutina-based company, which will make them the majority owners, the two companies said in a joint press release on Wednesday.

The two companies have carried out the transaction through a company they have jointly set up for the purpose, the Terra Mineralna Gnojiva (TGM).

“The purpose of the investment is to ensure the survival as well as the development of artificial fertiliser manufacturing at Petrokemija. The partners will cooperate in good faith and make every effort to enable Petrokemija to continue with its activities. Ina and PPD will therefore focus on improving Petrokemija’s finances by improving its product portfolio, making its operating costs sustainable, refinancing old debts, and further optimising the business,” the statement said.

Ina’s CEO, Sandor Fasimon, was quoted as saying that Ina had once again proven to be a stable and reliable partner to Petrokemija, as well as to the entire Croatian economy.

Petrokemija had on Monday published a public invitation for subscriptions for 40-45 million new shares, and said it planned to increase the company’s equity by raising 400-450 million kuna (€53.7-60.5 million) of fresh capital.

Earlier on Tuesday, Petrokemija released its business results for the first nine months of 2018, posting a 340.9 million kuna (€45.8 million) loss, increasing the loss from a 119.5 million kuna (€16 million) deficit in the same period the year before.

Earnings over the period reached 1.26 billion kuna (€169.4 million), down 12.7 percent year-on-year. Some 31 percent of earnings were generated in Croatia (393.3 million kuna, or €52.8 million), up 5 percent on the year, while 64.1 percent of the company’s revenue (812.7 million kuna, or €109.2 million) was generated abroad, down by 20.5 percent year-on-year.

Company’s expenditures went up 2 percent to total 1.6 billion kuna (€215.1 million), while investments amounted to 104.4 million kuna (€14 million).

(€1 = 7.42 kuna)

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