The Extraordinary Administration of Agrokor is currently working on establishing the final text of the settlement between creditors in the group, and Deputy Prime Minister Martina Dalić expressed confidence that this will ensure a stable future for the business, creditor repayment, and provide an additional impetus for the operations of the companies within that group.
At a thematic session of the Economic Committee of the Croatian Parliament on the operations of Agrokor, Deputy Prime Minister and Minister of Economy, Entrepreneurship and Crafts Dalić emphasized on Wednesday that the entire process of extraordinary administration and its goals – ensuring the stability of the economy and the continuation of Agrokor’s operations – have been significantly achieved, and only the achievement of the settlement will ensure a stable future for the business, creditor repayment, and provide an additional impetus for the operations of Agrokor companies.
>>>Dalić: The Extraordinary Administration is rapidly moving towards its plan to achieve a settlement
She also assessed that the processes of extraordinary administration and their results have contributed to the stability of the economy.
The extraordinary commissioner in Agrokor, Fabris Peruško, stated that the extraordinary administration is currently working on establishing the final text of the settlement based on the submitted claims and their legal status.
At the beginning of his presentation to the Economic Committee, Peruško emphasized that in the past seven weeks, since he was appointed extraordinary commissioner in Agrokor by the Commercial Court in Zagreb, his primary and by far most important goal has been to sign the settlement document in which creditors agree on all key elements and aspects of the settlement.
>>>Agrokor Management: Peruško did not send suppliers an email with the final draft of the settlement
In addition, he noted that they have also agreed on Sberbank’s participation in the process and the model for repaying the marginal debt to suppliers.
He reminded that the agreements on the settlement, which preceded the appointment of the new extraordinary administration, had stalled, and that Peruško and his deputy Irena Weber, with the help of Deputy Prime Minister Martina Dalić, directed all efforts towards establishing an open, intensive, and constructive dialogue among the representatives of the creditors.
– This resulted in the signing of the creditors’ principal agreement on the key elements of the settlement on April 10 of this year. In the meantime, we requested and received an extension of the duration of the extraordinary administration process from the Commercial Court for the legally prescribed three months, he stated.
>>>Peruško asks Agrokor’s directors to recognize more than 19 billion kuna in guarantees in the balance sheet
After signing the principal agreement, the extraordinary administration continued to work on establishing the final text of the settlement, which it is currently working on based on the submitted claims and their legal status.
Peruško then presented the principal agreement between the creditors to the committee members. He emphasized that the operations of the future group rely on the so-called arms-length principle regarding relationships among companies within the group, meaning that the parties in mutual relationships are equal and independent.
>>> The decision on the extradition of Todorić will be announced on April 20
– Also, to minimize the chances of repeating systemic risk in the future, it is expected that there will be no mutual borrowing between operational companies, and borrowing between operational companies and the holding company is foreseen in a very limited scope, necessary for optimizing the capital structure, he said.
He also reminded that the main criterion for determining the amount of settlement for individual claims is the EPM (Entity Priority Model).
In the continuation, Peruško elaborated on the eight key elements of the settlement.
>>>Peruško after the meeting in the Government: All key elements of the settlement have been agreed
Explaining the corporate structure of the new Agrokor group, he reminded that three companies would be in the Netherlands, while the parent company of all dependent and affiliated companies of the new Agrokor group would be a Croatian holding company. Creditors chose the Netherlands as the headquarters for the new holding structure because most of the claims are in foreign ownership or from international financial institutions, noted Peruško.
He also reminded that the new companies that would form the operational structure would be established as limited liability companies in direct ownership of the Croatian holding company, and as ‘mirror companies’ they would take over the business units of existing insolvent companies.
>>>Peruško: Creditors will manage the Agrokor group through a holding in Zagreb
– The new company ensures the continuation of operations after the settlement, without inherited obligations, i.e., known and unknown claims arising before the opening of the procedure. Additionally, the new company ensures that the old structure is separated from the new, in accordance with the settlement, he said.
Peruško also presented to the parliamentary representatives the part of the principal agreement regarding the treatment of creditors with claims arising before the opening of the extraordinary administration procedure, the debt structure of the new group, and the capital structure of the new group.
>>>Azimov satisfied with the settlement, announced Putin’s arrival in Croatia
In this context, he emphasized that for the refinancing of the so-called roll-up loan in the amount of 1.06 billion euros (from June 2017), the Croatian holding company will enter into a new credit arrangement, and the terms of that loan are yet to be determined and are being worked on.
For financing operational companies, the possibility of financing operational costs through revolving loans is foreseen, and Peruško emphasizes that mutual financing of operational companies as in the current Agrokor group is not foreseen, except directly, between the Croatian holding company and individual operational companies.
>>>Dalić admitted that she wrote lex Agrokor, Ramljak regrets having engaged the former company
Regarding the capital structure of the new group, he reminded that creditors’ claims would be replaced by a combination of equity and debt instruments, and the allocation would be determined based on the EPM model. Each creditor will simultaneously receive part equity and part debt instruments that will be interlinked in such a way that they cannot be disposed of separately, he said, adding that their sale will be allowed on the condition that it is done on the private market and that they are sold together.
Creditors will influence the management of the new group through the appointment of management and restrictions on their actions, he said.
He also elaborated on the agreement with suppliers regarding further repayment of the so-called marginal debt, reminding that the maximum amount that can be paid will be 80 million euros. A special agreement has established that creditors have a conditional right to pay the remaining part of the marginal debt over a period of four years, subject to certain results of Konzum.
>>>Grmoja: Is it still shocking to anyone that the extraordinary administration signed something they did not read
Retail companies of the new Agrokor will also retain such creditors as suppliers for a period of five years, Peruško reminded.
He also highlighted the agreement regarding the depository for holding settlement instruments related to disputed claims, as well as that among the key elements of the settlement is the agreement that binding contracts supporting the settlement will be concluded before the actual conclusion of the settlement.
Peruško reminded that all employment contracts of employees will be transferred to the new group. “We intend to maintain the maximum employment that has been preserved throughout the entire process of extraordinary administration in the Agrokor system,” said Peruško, who is firmly convinced that the extraordinary administration process will be successfully concluded with a settlement within the legally prescribed timeframe.
