No One Wants to Buy Fortenova, Vujnovac is Selling to Himself

In these circumstances, no one is interested in buying Fortenova Group, or its owner MidCo. This is roughly the content of a letter that the company’s Management sent to the unsanctioned co-owners, asking them for action, reports Indeks.

N1 possesses this document in which the Management requests shareholders to actively engage and devise a plan to save the company. The problem of Fortenova has two key components – Russian ownership and an unfavorable bond debt exceeding one billion euros.

Fabris Peruško and his associates want to avoid the inability to pay those bonds controlled by the American fund HPS, which are due this autumn. If they do not find another solution by then, at that moment, the American fund HPS will take over the Fortenova group due to unpaid debts, writes N1.

Fortenova found itself in this situation because, as a consequence of Lex Agrokor, this is a company with 50 percent Russian, sanctioned ownership. HPS’s financing was agreed upon at a time when no one else wanted to finance the Fortenova group, and without more favorable refinancing, there is not much perspective for this company.

Upcoming Resolution

The legal solution found is for the umbrella Foundation to sell the ‘lower’ company MidCo, along with everything we understand by the name Fortenova. MidCo with new owners would not have problems with sanctions. The money obtained would be distributed among the current shareholders in the Foundation, with the Russian part remaining on a blocked account for the time being.

Although it is not explicitly stated in the letter, it appears to be a call to co-owners (except for SBK ART from Russia) to gather funds themselves and buy MidCo. The catch is that, as long as the Russians are sanctioned, the key co-owner Pavao Vujnovac will have the most influence on the price at which the company will be sold, presumably to himself.

The resolution of this story should be known in two weeks. In the meantime, the sheikh who claims to have bought SBK ART in Moscow is also not giving up. Today, he is trying to block the holding of a new assembly of Fortenova in court in Amsterdam.

Let us recall, Fortenova announced the sale at the end of April this year. The reason for the sale is the sanctioned legal entities currently in its ownership structure, and the goal of this process is for the Fortenova group to continue without them as co-owners, as announced by Fortenova at that time.

– We informed potential investors about the results in 2022, which exceeded 5.2 billion euros in revenue and 300 million euros in operating profit, and our relative indebtedness, or the ratio of debt to operating profit was 3.5 times, which is a significant reduction over the last four years. If we also look at our cash position, we ended the year with over 280 million euros in cash on hand – he said.

Evaluating this as good results, he stated that they are not sufficient for the group to achieve favorable long-term financing in international markets until they resolve the existing ownership situation.

– It is important to note that from any payment that would occur to the owners of the Fortenova group, suppliers from the Agrokor creditors’ settlement, to whom there is still a debt of 78 million euros, will be settled first. This money will be paid as a priority – emphasized Peruško.