The indebted food and retail giant Agrokor has improved its operations and efforts are under way to refinance its debts and boost profitability, pending a ruling of the High Commercial Court on the debt-for-equity settlement reached with its creditors earlier this year, the company's emergency administrator, Fabris Perusko, said on Wednesday.
Perusko and his deputy Irena Weber met earlier in the day with Prime Minister Andrej Plenkovic ahead of Economy Minister Darko Horvat’s presenting of a report on the implementation of state-appointed emergency administration law at Agrokor, after it took temporary control over the private-owned company in April 2017.
“The work done by the emergency administration has resulted in saving the company’s operations, and its improved business performance, Perusko said, adding that Agrokor’s creditors approved the settlement plan in July by a majority vote of 80.2 percent.
Following the adoption of the plan, dozens of separate complaints against it were lodged with the court. Following the court rulings, the emergency administration procedure is expected to end, with the company taken over by its new shareholders.
“We are now expecting the ruling of the High Commercial Court. As for the company’s operations, we have been working on two main things – refinancing the oldest loan, which must happen once the settlement agreement becomes final, and increasing profitability,” said Perusko.
He said that the emergency management’s monthly reports to the Economy Ministry showed that the company was operating well, better than in 2017, and as planned.
Asked how long he thought he would remain in the post as emergency administrator, Perusko said that if the High Commercial Court made its ruling in the next month or so, the emergency administration would complete its mission by the end of the Q1 or Q2 of 2019.
He was also asked to comment on the most recent e-mails dating from March 2017, published by N1 television, indicating that the law which enabled state administration at the company, dubbed Lex Agrokor, was specifically tailored to favour the American hedge fund Knighthead, Perusko told reporters that they are “obviously misinformed.”
“I and Mrs (Irena) Weber came to work at Agrokor as part of the emergency administration a month after it took over the company,” Perusko, who was part of the original executives led by former administrator Ante Ramljak, said.
Zagreb court to rule on debt settlement by the end of the year
The High Commercial Court is expected to rule on the Agrokor debt settlement agreement by the end of 2018, and the implementation of the settlement is likely to start two or three months after that, Economy Minister Darko Horvat said at the cabinet meeting on Wednesday.
“We expect a ruling from the High Commercial Court by the end of the year, so that in February or March next year the emergency administration with a team of about 250 experts could start implementing the settlement,” Horvat said.
He said that despite an overall drop in revenues, Agrokor had increased its operating profit by 12 percent as a result of focusing on the profitable segment of its business and giving up on unprofitable parts of the conglomerate.
The Agrokor group’s revenue was 16.1 billion kuna (€2.17 billion) over the first eight months of 2018, down by 7 percent compared with the same period in 2017, while operating profit rose by 12 percent to 1.46 billion kuna (€197 million).
Agrokor’s creditors reached the settlement on July 4 by a majority vote of 80.2 percent. A total of 92 appeals have been filed against the settlement deal, and Agrokor has submitted a single response to all the appeals.
After the completion of the settlement process, Agrokor will be owned by its former creditors. The largest stakes will be held by Russian banks Sberbank and VTB (39.2 percent and 7.5 percent respectively) and bond holders (25 percent).
London court to rule on extradition to former Agrokor CEO on Thursday
In another piece of the Agrokor saga, London’s High Court is expected on Thursday to deliver a final ruling on the right of the founder and former CEO of Agrokor, Ivica Todoric, to appeal against the lower-court ruling which okayed his extradition to Croatia.
The High Court will decide on the motion by the Croatian businessman’s defence lawyers to appeal against an earlier April ruling in which his extradition to Croatia was approved, where he is wanted by Croatian investigators for fraud and embezzlement.
After the Agrokor debt crisis broke out, Todoric had fled to London, where he was arrested in November 2017 on a European warrant issued by Croatia. He was released on bail, but he had to hand over his passport and was ordered to wear an electronic tag and report to police three times a week. He said then that he would use every legal means available in the UK to avoid extradition to Croatia.
In September this year, Todoric’s defence lawyer James Hines told the court that the deposition by former Economy Minister Martina Dalic given to anti-corruption police Uskok and leaked to the media could serve as evidence to corroborate the Todoric’s claims that the investigation against him in Croatia is politically motivated.
Todoric, his two sons and 12 Agrokor executives and auditors are suspected of fraud totalling 1.14 billion kuna (€153 million).
(€1 = 7.42 kuna)
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