The extraordinary administration procedure in Agrokor has been closed and Agrokor d.d. has been struck from the Court Registry, Fortenova Group said in a press release on Thursday.

With its 19 July ruling, the Zagreb Commercial Court established that with the legally effective amalgamation of 46 non-viable companies to the debtor Agrokor d.d. as transferee, the Settlement Plan of Agrokor’s creditors is considered implemented and the extraordinary administration procedure over the debtor closed.

“One of the world’s major restructuring-through-bankruptcy proceedings, recognized as such on an international level, has thus been successfully completed, after having gained legal legitimacy in the European Union, United Kingdom, the USA and Switzerland,” according to the press release.

During the extraordinary administration, it said, “the overindebted Agrokor, although in bankruptcy, continued its business with all operations and full employment having been preserved in the process. At that point the system employed over 50,000 people in SE Europe and its failure, due to its impact on thousands of associated companies, would have had severe negative consequences on the economies of Croatia and all countries of the region.”

The extraordinary administration began on 10 April 2017 and comprised 77 Agrokor subsidiaries. The company’s debt totalled HRK 56 billion, with a debt to operating profits ratio of around 30 times and only HRK 6 in its accounts.

Within only a year, extraordinary commissioner Fabris Peruško and his team normalized operations and completed negotiations on the creditors’ settlement, and the Settlement Plan was adopted with over 80% of the creditors’ votes in July 2018 and declared final and non-appealable in October 2018, the press release said.

The most important result of the extraordinary administration, besides the settlement and preserved business operations, was that during the procedure the debts to 2,400 micro and small suppliers were settled in full, while other creditors’ recoveries amounted to 60% on average.

All payments to suppliers and the overall costs of stabilizing the collapsed operations were settled from Agrokor’s operations and assets, without spending any Croatian taxpayers’ money.

The extraordinary administration also received international legal protection and with the TMA Award, the international financial industry declared it to one of the world’s best restructuring processes in 2018.

With the cessation of Agrokor’s existence, Peruško’s powers and duties as extraordinary commissioner, under the Act on Extraordinary Administration Proceedings in Companies of Systemic Importance, cease.

“We can rightfully be proud to have completed one of the most important economic processes ever to have taken place in Croatia, with impact on the entire region. It was a challenging and complex process, the scope of work was enormous and the deadlines short. During the very difficult settlement negotiations we had to reconcile the frequently diametrically opposed interests of the different creditors. In our attempts to reach an agreement that would be acceptable to everyone, we had to face tensions, renouncement and compromises,” Peruško was quoted as saying.

“The high percentage of support provided by the creditors to the Settlement Plan at the hearing and everything that we have done thereafter in transforming the company towards Fortenova Group, bear witness to the fact that we have had the knowledge and the determination required to manage this complex process,” he said.

The government, he added, “the financial creditors, suppliers, employees, myself in the capacity as Commissioner and our entire team have exerted exceptional efforts for the Extraordinary Administration Procedure to secure viable operations for a company that had practically been bankrupt.”

“This was the basic assumption for everything that we have done in the period of three and a half years since the incorporation of Fortenova Group, which we have brought to a point where it has five billion euros of revenue, a leverage ratio of less than 4 times and the status of one of the most desirable employers and major investor across the region,” Peruško said.