Chairman of the board of the newly renamed Fortenova group, Maxim Poletaev, met with Prime Minister Andrej Plenkovic and other government officials on Wednesday to discuss the future of the food and retail giant.

Fortenova, which was created to replace Agrokor as part of the debt-for-equity deal struck between Agrokor’s former creditors and state-appointed administration, is still the largest private-owned company in the country and has a dominant role in the national food and retail sectors, with dozens of subsidiaries operating in Croatia and neighbouring countries.

After Agrokor had entered a severe liquidity crisis in early 2017, it was saved from the brink of bankruptcy via a controversial special law on state administration, dubbed Lex Agrokor, which was passed by parliament in April 2017. The law proclaimed the company – which at its height employed 60,000 people – a strategic interest, and gave company management to governmment-appointed administrators.

“In little over two years since the crisis at Agrokor started, we reached the end of the settlement deal negotiations and the launch of the new Fortenova group. About two years since the passing of the law on state administration, which started the enormous business and legal endeavours to restructure Croatia’s largest company, which brought a large number of issues and problems and which threatened the stability of the national economy… we can say today that the whole process was a success and a huge achievement…” Plenkovic told reporters after the meeting.

‘Best job I have ever seen’

Poletaev was formerly deputy CEO of Russia’s Sberbank, the largest single creditor of the former Agrokor group with a €1.1 billion claim, out of its total debt of around €7.8 billion at the time.

Following the debt-for-equity deal, Sberbank ended up owning a 39.2 percent stake in its successor company Fortenova, with Poletaev becoming chairman of the company’s managing board.

On Wednesday, Poletaev praised the work that Agrokor’s state-appointed administrator Fabris Perusko had done in securing a debt-for-equity deal which brought back the company from the brink of bankruptcy, and also the legal provisions of Lex Agrokor.

“The extraordinary administrator did a huge job, the best job I have ever seen, and it’s a very good example of such a procedure, and it’s a good example for all countries and all companies. It’s very seldom that in such a short period of time we have achieved the solution,” Poleatev said.

Sberbank committed to Fortenova

When asked about the company’s plans going forward, Poleatev said that although Fortenova’s core businesses did not represent a key asset for Sberbank, the bank is keen on helping the company increase its value in the “medium term.”

In January, a Sberbank executive was quoted by Reuters as saying that the bank had plans to sell its stake at Agrokor in the first half of 2019. Poletaev did not talk about any possible sale on Wednesday.

“For Sberbank it is very important to be here, and we are very committed to do business here, in the medium term. For us it’s not a key asset, but we are going to increase the value of this company, together with other shareholders. And because of that we elected a very professional, high quality, board,” Poletaev told reporters.

Apart from Sberbank’s 39.2 percent, other major owners in Fortenova include the American hedge fund Knighthead Capital which owns 24.9 percent, Croatian banks which hold 15.3 percent, and another Russian bank, VTB, 7.5 percent.

‘Money loves silence’

Poletaev also confirmed that the primary goal for Fortenova now is securing a refinancing deal for the €1 billion roll-up loan with super-senior status that Agrokor had taken out in 2017 when it was on the verge of bankruptcy.

The loan is now seen as a key stumbling block in developing the company’s businesses, as its interest is steadily rising. Local media reported this week that the interest reached 11.5 percent on Monday, and is set to continue increasing by 0.5 percentage points every month, with Fortenova management now hoping a refinancing plan would allow new borrowing at a much more affordable 8-8.5 percent interest rate.

“The urgent aim for us is to refinance the super-senior loan. We are very focused on achieving a compromise with our new creditors and to solve this issue. I think Mr Perusko will command this situation (development), but we are involved a lot in the process, and I think until mid-summer, we have to achieve a solution for this issue,” Poletaev said.

Poletaev also also asked to comment on recent media speculations alleging new inquiries are possible into the decisions made under the original crisis manager, Ante Ramljak, who led the company from April 2017 to February 2018.

“I don’t support any investigations any more, we are overweighted with such rumours. Money loves silence.”

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