By acquiring 67.5 percent of creditor claims, Meteor Group is one step closer to taking over Badel

A meeting was held today at the Ministry of Economy regarding the fate of Badel 1862, which lasted almost an hour longer than expected. That the negotiations were interesting, and perhaps even heated, was revealed by the technical minister Tomislav Panenić, who stated that Meteor Group has secured, or acquired, 67.5 percent of creditor claims in recent months, making any discussion about other bidders or strategic partners redundant.

Badel reported at the end of May that four companies responded to the call for active involvement in implementing financial and operational restructuring measures of the company within the pre-bankruptcy settlement process. Interest in strategic investments was expressed by Đakovački Meteor, Zagreb’s Oštrc, Slovakian St. Nicolaus, and Split’s Stanić Group.

The management of Badel retained the right to make the final selection of a strategic investor who will participate in the pre-bankruptcy settlement process and with whom financial and operational restructuring measures will be determined, and it assessed the offer from Meteor Group as the best, which is also preferred by the unions as a domestic partner.

Done Deal

Faced with a done deal, Panenić stated that the tactic of acquiring creditor claims employed by Meteor is not in the spirit of “fair play” and contradicts “business ethics,” although it is not illegal. The minister noted that he has been under strong pressure from lobbyists advocating for Meteor’s interests in recent months.

– At least a hundred people have contacted me asking me to make a decision about Meteor, which also enjoys the support of the Atlantic Group – he said, suggesting that a domestic partner is not necessarily the best choice and that, unlike St. Nicolaus, whose interests were represented by former Minister of Economy Damir Polančec, it is heavily indebted.

– From publicly available data, we have determined that some are smaller than Badel in terms of assets, and specifically, Meteor’s debt exceeds the value of its assets; last year it took over Labud, which is still in restructuring, and we sought proof that they would be able to fulfill their obligations – he said, expressing discontent over support for one of the bidders without notifying the owners, the supervisory board, and the Ministry of Finance.

– This is a very poor relationship of a state company towards the Government. I will seek to protect the interests of Croatia. The ownership structure will be defined, and the responsibility for managing Badel is now on Meteor and the Atlantic Group – concluded the minister.

Union representatives expressed satisfaction with the domestic strategic partner who, according to the documents presented at the meeting, will take on debt instead of Badel.

Immediately after technical Minister of Economy Tomislav Panenić held a press conference, Meteor Group issued a statement which we present in full.

– Meteor Group yesterday informed the Management of Badel 1862 and the Ministry of Economy in writing that after acquiring the claims of the two largest financial creditors with collateral rights on key assets – the plant in Žitnjak and wineries in Daruvar and Benkovac, as well as agreements reached with creditors from the group of financial institutions and the group of other creditors, it gained control over more than 2/3 of the claims filed in the pre-bankruptcy settlement of Badel 1862. In this way, in accordance with the Law on Financial Operations and Pre-Bankruptcy Settlement, Meteor Group can independently vote to accept the Financial Restructuring Plan of Badel 1862. One of the creditors who supported Meteor Group is also the Atlantic Group.

Meteor Group participated in the selection process of a strategic partner with the highest financial and binding offer, which was explicitly confirmed in writing to the Commission back in July. In the offer worth more than 26 million euros, we clearly stated our intention for the rapid deleveraging of Badel 1862 and the conclusion of the pre-bankruptcy settlement in the shortest possible time, and the activities we undertook in the meantime have only proven the seriousness of our intentions and our ability to realize everything stated in the offer.

Meteor Group is a fast-growing and low-debt company with significant investment potential – the key debt indicator (debt to EBITDA ratio) for Meteor Group is only 2. To carry out the entire transaction, we have already secured all necessary funds through a combination of our own resources and credit borrowings of Meteor Group, of which we also presented written evidence as a clear confirmation of the seriousness of our offer and investment potential.

St. Nicolaus: We know that our offer is the best option for Badel

Regarding today’s press conference by Minister of Economy Tomislav Panenić about Badel 1862, the company St. Nicolaus also issued a statement. We present their statement in full:

“We are pleased that the Minister of Economy and the relevant authorities have made the necessary efforts throughout the process to make the best decision for Badel 1862. Aware of the genuine need for the real financial strength of Badel 1862’s future partner, they sought additional information, indicating that the choice of a strategic partner will not depend on whether the future partner is a Croatian company or another company from the European Union of which Croatia is a part.

We awaited with great interest the information that came today from the Ministry of Economy. From the above, we believe that all relevant institutions involved in the process will thoroughly examine all additional documentation received and determine its authenticity.

We know that our offer is the best option for Badel, while our undeniable advantages are our financial strength and available sources of direct cash investment, without a penny of additional required credit. Because let us remind you, only after fully resolving existing debts through payment and agreement with creditors with whom we have established quality contact, can Badel 1862 focus on development. In our offer, we clearly emphasized that if the offered amount of 25 million euros is not sufficient, we are additionally ready and able to invest more, and through the business plan, we highlighted a plan for additional investments of 9 million euros over a period of 5 years.

We would also like to emphasize that, along with financial resources, we guarantee the continuation of production at existing production locations, the preservation of Badel’s brands, the preservation of employment, the improvement of sales and marketing, and development and expansion through further acquisitions in the Adria region.

That is why we believe that based on all of the above, we will be recognized as a serious and long-term investor with whose concrete financial strength and industry knowledge Badel 1862 can surely become a successful Croatian company once again, as it once was.

We will gladly comment on the decision of the relevant authorities upon receipt of the official decision, which we still have to wait for.” concludes the statement from the company St. Nicolaus.