- Published: 05.09.2019.
PM: Decision by Interim Creditors' Council message of Fortenova's security and stability
Prime Minister Andrej Plenkovic on Thursday said that he was sorry that a decision by Agrokor's Interim Creditors' Council regarding the refinancing of a roll-up loan was not adopted unanimously, because he considers that decision to be exceptionally important as it sends a message of the company's security, stability, further consolidation and its successful business operations in the future.
Opening the cabinet meeting on Thursday in reference to the now defunct Agrokor conglomerate, now the Fortenova Group, Plenkovic said that "unfortunately their (Council) decision was not adopted by consensus, even though the payment of the border debt to suppliers, as stipulated by the settlement, is not brought into question by the Fortenova Group either," which he added is something that large and small suppliers are well aware of.
Agrokor's Interim Creditors' Council on Wednesday decided to refinance a roll-up loan, with three votes by financial creditors for and two votes by suppliers against.
As the decision received the support of the majority, Fortenova CEO Fabris Perusko said that he would continue with activities that are necessary to round off the refinancing of an SPFA loan with a bond on Friday.
The Fortenova Group will refinance a roll-up loan taken in June 2017 by releasing a bond with a four-year maturity and amounting to €1.2 billion at an interest rate of 7.3% plus EURIBOR and a bottom threshold of 1%. The refinancing will be led by the US based HPS Investment Partners fund with the participation of the VTB Bank.
The roll-up loan of €1.06 billion was used to cover the now defunct Agrokor conglomerate's debts and when the Fortenova Group took over Agrokors' business, that loan carried an interest rate of 11.5%, which later increased to 14% and an effective rate of 18%.
The Fortenova Group offered to pay the border debt owed suppliers in the amount of €5 million this year and later raised that amount to €9 million. However, suppliers did not support the refinancing.
"Everything will be paid in the years to come. It would have been good if that decision had been made by consensus but it was not. In any case, the government and parliament's engagement, by adopting the law on the emergency administration, was very bold, very brave ahead of Easter 2017, at a time when Agrokor was frozen, when suppliers had stopped supplying Konzum (supermarket chain), when the company, which employed 60,000 people in Croatia and other countries in Southeast Europe, risked collapsing and causing a chain reaction affecting suppliers, Croatian farmers, Croatia's financial system," said Plenkovic.
He said that that move has come across positive assessments in Europe and the world.
He underscored that with this decision the company will not be burdened with high interest rates which had increased over the past few months, but at an interest rate that will not only allow the company to exit the crisis and hardships but to continue doing business solidly.
He said that the decision means the company is on the path to recovery, quality business and both company and job survival, and all that without one kuna of taxpayers' money being spent.
He added that the decision by the creditors' council perhaps is not perfect but in substance it is exceptionally important because it is sending a message of security, stability and further consolidation of the company, its successful business operations in the future and, in a way, rounds off the entire episode.