Miroslav Vitković new CEO of Podravka

Members of the Supervisory Board of the food company Podravka have appointed Miroslav Vitković as the new CEO of the company, reported the Chairman of the Supervisory Board Ljubo Jurčić at a press conference held after a lengthy meeting of the Supervisory Board.

He added that the meeting of Podravka’s Supervisory Board also discussed the auditor’s report on disputed financial transactions that have put the company in a difficult position, as well as the business plan for 2010 and the report from the Management Board members on negotiations with banks regarding the restructuring of commercial loan repayments and guarantees that Podravka provided for several loans.

"The auditors determined that most of the disputed financial transactions were carried out this year and that transactions from previous years no longer burden Podravka’s account, and their overall statement was within our expectations, as they confirmed previous findings that risky investments, which were unknown, amount to 311 million kuna. As for the Zadar company Adria, the Management must develop a model for continuing cooperation and clarify a number of financial transactions. Furthermore, Podravka has the right to the trademark of olive oil and olives produced and processed by the Split company SMS, and therefore will most likely initiate their production in Split by the end of the first quarter, thereby saving jobs and the value of that brand," said Jurčić.

He announced that Podravka will withdraw around 28 million kuna from investment funds by the end of June next year, will collect 80 million kuna in loans given to Split’s SMS by selling 37 percent of the shares of the company Mirna Rovinj, which SMS provided as collateral, and there is a solution for collecting the guarantee that the company provided for 107 million kuna in loans taken by the Varaždin Fima group from Erste Factoring.

"The money for that loan, which is due for payment on January 22 next year, Podravka has secured and if necessary, it will pay it, and later recover it through recourse from the assets of the Fima group. Commercial papers and the loan that Podravka has with Zagrebačka banka will also not be a problem, as we have prepared a letter of intent in which we will request the restructuring of these obligations, which will also include the aforementioned loan of 107 million kuna. Additionally, it is likely that we will reduce the debt by 10 percent through the restructuring of the loan," emphasized Jurčić.

He also referred to the 6.2 million euros that Podravka deposited in the Hungarian OTP bank. Jurčić told reporters that he believes the bank has given that money to someone as a loan for purchasing Podravka’s shares, and that those shares were pledged for that loan at a price that is now higher than the market price of Podravka’s shares.

"OTP bank now says it will sell the shares if we insist on getting our money back, but we will have to cover the difference in their price to our detriment," said Jurčić. However, he added, "we have no document that Podravka committed to this guarantee, so this story will continue for a while. Personally, it seems to me that this problem arose when the investment house Meryl Lynch withdrew from the project of financing the purchase of Podravka’s shares, for which the company itself guaranteed, and OTP bank entered the game with a loan of 34.2 million euros. I believe that we cannot access our deposit now because it is actually the first installment of repayment of that loan," he said.

The Chairman of Podravka’s Supervisory Board Jurčić also announced that Podravka’s management anticipates moderate business growth of 1.6 to 2 percent and that savings will continue to be among the priorities. Furthermore, the number of members of the Supervisory Board will be reduced from 11 to seven, and this body will develop new regulations for managing the company. Jurčić added that the Shareholders’ Assembly will be held in the first half of February next year. (H)