Agrokor control handed over to Croatian Government | Progresiv
On Friday 7th April, Agrokor’s CEO and majority owner, Ivica Todorić, handed over control of the indebted company to the Croatian government. Mr. Todorić activated a process of ‘extraordinary management’ following the passing of a special law that was voted through by Croatia’s parliament that same day. Law passed to protect Croatia’s biggest private sector employer 
Agrokor reported in 2015 that its debt, to various European and Russian banks, amounted to 3.4 billion euros. This debt is more than three times its capital assets and almost half its sales revenue that same year. The special law, nicknamed ‘Lex Agrokor’, applies to companies of systemic importance to Croatia. The company must employ more than 5,000 workers and report revenue of at least HRK7.5 billion (1 billion). The law was formed to avoid the impact of Agrokor's bankruptcy on the Croatian economy. Agrokor's revenue stream of 6.5 billion euros in 2015 made up 15% of Croatia’s nominal GDP, and has 40,000 employees in Croatia and in other Balkan markets.
‘Lex Agrokor’ empowers Croatia’s judiciary to name Agrokor’s overseer and to placed it under the control of the Ministry of Finance. The judiciary’s appointed ‘extraordinary commissioner’ will oversee the restructure of Agrokor and its debt repayment. The law stipulates that if within 15 months, following the activation of this law, a settlement is not reached between the debtor and lender then bankruptcy proceedings can begin.
Earlier in 2017 Agrokor replaced its Konzum and the Mercator CEOs, following the latter’s resignation. They will report to Croatia’s judiciary assigned ‘extraordinary commissioner’ in overseeing Agrokor’s restructuring. The Croatian retailer and its creditors also hired global consultancy agency, Alvarez & Marsal, as advisers in the restructuring process.
The restructuring process aims to place Agrokor on a path where it avoids bankruptcy and is placed on a sustainable path for debt repayment. Croatia’s assigned extraordinary commissioner is expected to ensure payments to suppliers and maintain the flow in supply chain in the retail and food and agriculture business segments. All of this whilst servicing debt repayments to the banks.
There are little signs that the Konzum and Mercator operations will be closed or have reduced activity in 2017, with the Croatian government expecting for business as usual. (www.igd.com)
