Extraordinary Commissioner of Agrokor Ante Ramljak emphasized on Thursday at the parliamentary committee for economy that he is ready to bear the consequences and take the blame if the members of parliament and the Government assess that he has compromised the extraordinary administration process.
“If you members of parliament and the Government assess that I have compromised the process, I am ready to bear the consequences and take the blame,” Ramljak emphasized at the end of his comprehensive report on the progress of the extraordinary administration so far.
Ramljak and Deputy Prime Minister and Minister of Economy, Entrepreneurship and Crafts Martina Dalić reported at the meeting of the Economic Committee on how the settlement process in Agrokor is progressing, as well as on the overall restructuring process of the group.
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Dalić also proposed that this parliamentary body be informed about the progress of the extraordinary administration in Agrokor at regular meetings at certain intervals.
In response to questions from representatives, she also highlighted that she is the main author of the Law on Extraordinary Administration.
She also stated that the Knighthead fund did not participate in its preparation and that she did not meet or talk with their representatives.
“If you ask me about political responsibility, I consider myself responsible for all Agrokor employees receiving their salaries, all companies operating, and for the extraordinary administration process being on the verge of a settlement. That was my job and duty, not to fold my arms and wait,” Dalić said.
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In response to questions from representatives, Ramljak also said that he requested an extension of the extraordinary administration period for three months, until July 10, and he is convinced that the settlement will be completed by then.
The extraordinary commissioner expects an agreement among creditors on the settlement by April 10 of this year. “Creditors will agree among themselves even before April 10, but there are court deadlines,” Ramljak said, adding that the plan is to complete everything by mid-June when a hearing for voting on the settlement should be held.
Ramljak presented a detailed chronology of the extraordinary administration process
In a detailed chronological overview, Ramljak first mentioned that on April 7, 2017, when the founder of Agrokor Ivica Todorić signed the request for activating the law on the extraordinary administration procedure with the members of the Agrokor Management Board, he was in Split on vacation.
The next day, on Saturday morning, April 8, according to him, he was called by the then President of the Parliament and Most Božo Petrov with the question of whether he would like to accept the position of extraordinary commissioner. Ramljak says he replied that he could not accept it because that person must have the support of both coalition partners.
“I knew, namely, that I was characterized as ‘Čačić’s’, ‘Škegrin’s’ or I don’t know whose man because I worked with those people, and I knew that this fact disqualified me from the start with some actors on the political scene,” he stated.
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However, after that, there was also a call from Deputy Prime Minister Martina Dalić to return to Zagreb for a meeting with the Prime Minister, who wants to propose him as the extraordinary commissioner.
Ramljak also recalled that on April 10, at the proposal of the Government, the Commercial Court in Zagreb appointed him as the extraordinary commissioner in Agrokor and that he took over the management of Agrokor.
“In the first week of the extraordinary administration, I found delays or complete halts in production in several manufacturing companies and extremely difficult supply for retail, which was completely without certain products. Agricultural companies faced shortages of animal feed, and at a time when preparations for the season should have been in full swing, Agrokor did not have sufficient liquidity even for timely payment of all salaries. Salaries were paid, but with delays that started back in December 2016,” Ramljak noted, describing the difficult situation Agrokor was in at that time.
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He also stated that at the moment he was appointed, he found completely empty accounts, that the balance on them was “literally 6 kuna”, and that it was necessary to pay salaries to workers for which 200 million kuna was needed, as well as that he had only three working days to secure money from banks. By the end of the day on Wednesday, April 12, a loan of 80 million euros was agreed with four banks, he noted.
Ramljak also said that by the end of April (April 27), he had to inform creditors that they could not rely on the official financial reports of the company prepared during Ivica Todorić’s time, as it was evident that they did not reflect the actual state of the company.
The first report on liabilities, prepared by the advisor he had engaged while Todorić was still in charge, determined that as of March 31, 2017, the total liabilities of the company amounted to 40.4 billion kuna. When the claims registration process was completed six months later, the total amount of established claims by creditors exceeded 57 billion kuna, he said.
Working on achieving a settlement
Among the major events that followed and the concrete results of the work of the extraordinary administration, Ramljak highlighted the achievement of an agreement in June last year on new financing in the amount of 1.06 billion euros. “Don’t think that potential creditors were competing to give Agrokor money sooner and more. The company did not have financial reports, and granting that loan was and remained a highly risky business, but when it was completed, it showed the creditors’ trust in Agrokor’s future,” he emphasized. He stated that without that money, Agrokor’s survival would not have been possible, nor would the preconditions for restructuring the company and achieving a settlement and its long-term survival have been created.
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Ramljak also recalled that at the beginning of October last year, revised financial statements of Agrokor d.d. and consolidated financial statements of the Agrokor group for 2016 were published, along with which the auditor PwC pointed out doubts about illegal activities that were outside their mandate according to auditing rules – non-disclosure of 3.9 billion kuna in liabilities, 2.3 billion kuna in operational and financial costs in the period from 2010 to 2015, and misrepresentation of 2.1 billion kuna as cash and cash equivalents. Because of this, Ramljak filed a criminal complaint against Mr. Ivica Todorić and other responsible persons to the County State Attorney’s Office in Zagreb.
He also stated that the advisory team and management of operational companies worked on restructuring operational business and developed sustainability plans for key companies.
In November last year, the process of collecting and registering claims was completed, and Ramljak also recalled that the structure of claims entering the settlement is extremely complex – about 5,700 Croatian and foreign creditors filed about 12,000 claims, their total amount is around 57 billion kuna, of which 41.5 billion kuna was recognized, while the total value of disputed claims is around 16.5 billion kuna.
He also recalled that at the meeting of the temporary creditors’ council on December 20, 2017, a proposal for the structure of the settlement in the extraordinary administration process was presented.
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“Further work on the settlement proposal as well as achieving a settlement, which is decided by creditors or all recognized claims, has since been the main focus of our work. Our goal is to achieve a settlement that will be voted on by the majority of all creditors within the legally prescribed timeframe, which is record short for such a complex restructuring, and thus successfully conclude the extraordinary administration process,” Ramljak conveyed.
Among other things, he stated that from the moment the extraordinary administration was opened until today, more than 2.5 billion kuna has been paid to suppliers on account of all claims, ensuring that the crisis from Agrokor does not spill over to the rest of the economy of Croatia and the region.
In November last year, it was announced that the cost of consultants would be between 58 and 69 million euros
He also stated that in accordance with the legal obligation in April last year, he selected the main advisor for restructuring, the company AlixPartners, and also engaged other legal and financial advisors, auditors, and other specialized consultants.
“Although the engagement and costs of consultants have recently become a subject of special public interest again, I remind you that I started publishing the costs of the overall business of Agrokor d.d. and specifically the costs of consultants in monthly reports since October last year, in accordance with the instruction of the Commercial Court. At that time, I announced that the total cost of restructuring, depending on the duration of the process and the successful conclusion of the settlement, would amount to between 58 and 69 million euros. This amount is slightly less than 1 percent of the total debt of the Agrokor group and is significantly below the percentage in comparable situations worldwide, which is over 3 percent of the debt,” he emphasized.
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He also referred to Texo management, the company he worked for before Agrokor, which was engaged as a consultant for the extraordinary administration. “When I accepted the job of extraordinary commissioner, I did not have time to familiarize myself with the situation in detail, as I had to secure money in a short time,” he said, explaining that he had to rely on people he knows, trusts, and has worked closely with, and that he never intended to hide their names.
In this sense, he stated that he had already announced on April 12 last year who is in his advisory and consulting team.
“From today’s perspective, I can understand why, looking from the outside and with the passage of time, someone might assess that my move is immoral and possibly even corrupt. I regret that such a perception has been created, because, believe me, everyone who knows me through my 25-year business career knows that I work honestly and honorably, according to the best rules of the profession.
When I accepted this job, I was ready to make any sacrifice and put my entire reputation on the line to save the Croatian economy,” he noted.
