Zagreb Holding Reduces Debt by 100 Million Euros in Two Years

Zagreb Holding has submitted a proposal to the City Assembly of the City of Zagreb for amendments to the club loan with more favorable financing conditions, and a joint press conference was held today in this regard. According to the statement, Zagreb Holding has nearly halved the loan debt from the loan taken out in September 2022 to urgently stabilize its financial position and reprogram inherited credit obligations.

– I am proud of this achievement of Zagreb Holding, which has repaid as much as 42 percent of the principal of the loan, or approximately 100 million euros, although it was obligated to repay 40 million euros during that period. This is, I remind you, a debt we inherited from the previous administration, and we are even repaying it ahead of schedule – said Tomislav Tomašević, the Mayor of the City of Zagreb.

– Based on these repayments, but also due to three years of positive financial indicators, Zagreb Holding has requested and received more favorable loan conditions from banks. These changes became possible due to concrete evidence of positive changes in operations, which were recognized by international credit agencies that have increased Zagreb Holding’s rating four times since June 2021 – explained Mayor Tomašević.

The President of the Management Board of Zagreb Holding, Ivan Novaković, recalled the situation in which the Holding found itself in 2021 when this management took over and the steps they took to financially recover it.

– In June 2021, Zagreb Holding was over-indebted, illiquid, and operating at a loss. Payments to suppliers were delayed by over 90 days. We inherited huge debts, and the loan debt alone amounted to 245 million euros, of which more than half of that amount related to short-term loans. These loans were due in the first year of the mandate, without any funds available to settle them. We still do not know what those huge loans were invested in, as the equipment and municipal vehicles were on the verge of being written off, the infrastructure was neglected, and investments were insufficient – emphasized Novaković.

From that difficult position, the Holding emerged with the help of a series of measures, the most important of which are a long-term loan from a club of domestic banks, restructuring, and rational management focused on utilizing its own capacities.

– As a result of these measures, today Zagreb Holding no longer has short-term obligations that threaten its operations, the company is liquid and operates positively – added Novaković.

Zagreb Holding has improved its operations and stabilized its finances, reduced the number of employees in administrative positions, and significantly increased the number of executors in operational roles. New trucks for waste collection, street sweepers, mowers, and numerous other machines have been procured. Workers’ material rights have been raised, and Zagreb Holding has become a desirable employer today, as stated in the announcement.

– Zagreb Holding has become a stable and sustainable company during the term of this city administration. From a loss-making entity on the brink of bankruptcy, with continuous erosion of operations, we have managed to reverse the business trends and create a sustainable company that regularly meets its obligations – emphasized the mayor, announcing further investments in the future.

Amendments to the long-term club loan agreement will be presented at the next session of the City Assembly on March 27, 2025.