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News 12 May 17

Croatia to Sell Parts of Agrokor to Repay Debts

Agrokor's state manager, Ante Ramljak, on Thursday said parts of the troubled economic giant will have to be sold off to cover its huge debts of over 5.4 billion euros.

Sven Milekic
BIRN
Zagreb
Ante Ramljak. Photo: BETAPHOTO/HINA/Lana SLIVAR DOMINIC/MO

Subsidiaries of the troubled economic giant Agrokor – which is in the throes of a financial crisis – will be sold in order to repay company debts to creditors and suppliers, the state appointed extraordinary manager of the company, Ante Ramljak, told Nova TV on Thursday.

Ramljak explained that Agrokor’s businesses is being divided into four sectors – retail, operative companies in the food industry, agriculture and non-core business.

“Most people work in these first three [sectors] … We’ll probably sell the non-core companies in future and, from that [sum], will reimburse a certain amount of the debt,” he said.

He added that no major layoffs from the first three sectors were expected.

As the company announced that Agrokor’s 19 biggest subsidiaries owe debts exceeding 5.4 billion euros, Ramljak explained that certain companies must be sold to cover this debt, and that Agrokor will cease to exist as a unified group or a holding within a year.

“You have to understand one thing - in 12 months, Agrokor, as it now looks, will not exist as a group. Agrokor holding will not exist,” he concluded, naming some of the more prominent subsidiaries that will continue to work under new ownership.

At the end of his interview, Ramljak also noted that 500 million euros of “undefined debt” could not be accounted for  – once more pointing to assumed irregularities in the company’s business activities over the years.

Croatia's government named Ramljak Agrokor’s extraordinary manager on April 10 under the terms of a special law, on Procedures for Extraordinary Management in Companies of Systematic Significance for the Republic of Croatia, adopted in parliament on April 6.

Businessman Ivica Todoric, Agrokor’s owner, handed over the company to state control on April 7.

Although technically Todoric still owns the company, management is now in the hands of Ramljak, an experienced figure brought in to consolidate the company’s finances during the crisis management period.

Agrokor'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 30,000 employees. Additionally, Agrokor’s suppliers – both small and big – employ another 150,000 people.

It employs another 20,000 people in neighbouring Bosnia, Serbia and Slovenia.

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