Croatia: Agrokor Starts Repaying Indebted Suppliers
By Sven Milekic
The state-appointed management of Croatia’s biggest company, Agrokor, said the company will now start repaying its small suppliers with a first tranche of 18 million euros.
Croatia’s troubled giant Agrokor will start paying out the first 18 million euros to cover its debts to its small suppliers, the state-appointed extraordinary manager, Ante Ramljak, said on Wednesday.
Under the Law on Procedures for Extraordinary Management in Companies of Systematic Significance, the Croatian state undertook a 15-month period of “crisis” management of Agrokor in April.
In June, the management secured around 30 million euros to cover Agrokor’s debts to small family farms and micro companies with annual revenues below 700,000 euros.
The first 18-million-euro payout will start from Thursday after Wednesday’s meeting of the creditors’ council insisted on the priority being given to smaller creditors – as those least able to withstand prolonged non-payment.
“There are 2,100 suppliers, the list is long, and I believe there may be some omissions on that list,” Ramljak said, emphasising that they will remedy any omissions discovered later on.
He said that the fall in sales by Agrokor’s retailer, Konzum – the biggest retailer in the country – had also stopped.
“On a daily basis, we are [still] generating some small losses, but this [lossmaking] trend has stopped and is moving toward zero … Sales are down 2.2 per cent compared to the last year, which is very good concerning the losses that we had at the beginning of the process,” he said.
Asked to estimate the findings of the financial audit – which has estimated the company’s losses at between 1.6 and 2 billion euros in 2016, according to daily Jutarnji list – Ramljak said he would not comment on the audit until mid-September.
After the company began experiencing serious financial troubles, the owner, Croatian businessman Ivica Todoric, handed it over over to state management in April.
The company’s role in the economy of Croatia is massive, with revenues of 6.5 billion euros in 2015 – almost 16 per cent of Croatia’s total GDP – and around 40,000 employees.
Agrokor employs another 20,000 people in neighbouring Bosnia and Serbia, while it is believed that suppliers and companies for the Slovenian retailer Mercator – which Agrokor bought in 2014 – employ around 70,000 people in Slovenia as well.
