PM Plenkovic: Gov't to support any effort leading to an agreement between all stakeholders

Prime Minister Andrej Plenkovic told reporters after meeting with the Agrokor concern's suppliers on Monday that the government was working intensively on calming the atmosphere regarding the situation in Agrokor.

Prime Minister Andrej Plenkovic told reporters after meeting with the Agrokor concern's suppliers on Monday that the government was working intensively on calming the atmosphere regarding the situation in Agrokor and supported any effort leading to an agreement between all stakeholders and ensuring a good restructuring of the concern and its liquidity while Josip Budimir, a representative of the suppliers, said that the pace of implementing the standstill agreement between Agrokor and its creditors did not suit the suppliers and the suppliers found government's bill on emergency receivership in big companies vital for the national economy necessary.

"We are conducting a dialogue with both the company and its suppliers and creditors," Plenkovic told a news conference after meeting with representatives of some 20 biggest Agrokor suppliers.

He recalled that the government had prepared a bill on emergency receivership in major companies of vital importance for the national economy, which the parliament would debate on Wednesday.

"The Croatian Government wants to support any effort leading to an agreement between all stakeholders, from the company itself to representatives of the creditors, banks and suppliers, both domestic and foreign, given that Agrokor operates in a number of countries in our neighbourhood. An agreement that would enable a good restructuring of the company and the availability of additional funding and liquidity, that would enable regular operations and the settlement of at least a part of accumulated obligations to suppliers, would definitely be the best move the stakeholders in a functioning market economy and free market as Croatia's, could make and we would gladly support it," Plenkovic said after the meeting with the suppliers, held at their request.

He called for "taking into consideration all stakeholders, from the smallest to the biggest suppliers, when looking for a solution."

Budimir, who is an executive at the Franck coffee and snack producer, said the meeting with Plenkovic discussed the results of negotiations between Agrokor's suppliers and the lenders "at which a certain level of agreement has been achieved, and a few more issues remain to be discussed today and tomorrow". He added that the suppliers "pointed to the need to urgently find a sustainable solution."

"In that context, we expressed support for the government's plan to adopt the said bill," said Budimir.

He added that the law would provide an institutional framework for dealing with the problem of Agrokor's blocked bank accounts as well as ensure all future claims for delivered goods necessary to revive economy activity, not only of the concern's retail companies but of their producers as well, who, he said, were in an unenviable position as well.

Budimir stressed that the suppliers considered "the standstill agreement as a good solution, however, we are not sure that given the available time, it would be possible to apply that solution urgently enough."

The standstill agreement is desirable and the suppliers are willing to join it in principle, but they think that the government's law would constitute welcome support to that solution, said Budimir.

Asked by reporters who would appoint Agrokor's emergency receivership management, considering speculation that banks have already chosen their "commissioner", Plenkovic said that there were two scenarios for the current situation.

Under scenario A, all parties involved - the concern owners, banks and suppliers - reach an agreement and the government supports the agreement, said Plenkovic.

If no such agreement is reached, a scenario B envisages the creation of legislative preconditions enabling the state to take charge of dealing with the situation, "with significant contribution from all parties interested in finding a long-term sustainable solution."

The PM added that the government was aware of media reports about the arrival of "world-renowned consultants specialising in the restructuring of big companies facing problems" and that it would contact the company in the coming days to "see how that process evolves."

The Vecernji List daily reported on Monday that Antonio Alvarez III, an executive manager for restructuring for Europe at the Alvarez&Marsal consulting company, would assume the post of chief restructuring officer in Agrokor after the Russian-owned Sbrebank, one of Agrokor's creditors, hired Alvarez&Marsal to find an exit strategy for Agrokor.

Budimir said that the suppliers had taken note of that information, but that they had not been consulted in connection with that.

Answering a reporter's question, Budimir said that so far suppliers had been in contact only with the creditor banks and the state, and that he did not know if Agrokor was willing to have the government-sponsored bill activated.

PM Plenkovic said Agrokor would be discussed during his visit to an international trade fair in Mostar, to be attended by numerous leaders of neighbouring countries, including Serbia's President-elect and Prime Minister Aleksandar Vucic.

At the end of September 2016, Agrokor owed its suppliers HRK 16 billion, and a half of the amount was owed to Croatian suppliers.

On Sunday evening Agrokor and member banks of the coordinating committee of Agrokor's financial creditors, which comprises Erste Bank, Privredna Banka Zagreb, Raiffeisenbank Austria, Sberbank, VTB Bank (Austria) AG and Zagrebacka Banka, signed a standstill agreement,  hold in abeyance the banks' claims from Agrokor.

Erste Bank has stated that the agreement is expected to facilitate the company's efforts to stabilise its business and ensure settlement of matured liabilities towards suppliers in the time ahead. The standstill should facilitate the company's efforts at resolving the issue of liquidity, ensuring the continuation of operation, protecting the company's value and presenting the basis for its sustainable restructuring.

According to unofficial sources, representatives of smaller financial institutions - smaller banks, factoring societies, etc. - met with Agrokor's major creditors over the weekend. The atmosphere at the meeting was positive and the smaller creditors are expected to join in the standstill agreement soon, possibly already today.

Text: Hina

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