Agrokor Part of Russia’s Geopolitical Plans?

By , 19 Mar 2017, 11:48 AM Business
Agrokor Part of Russia’s Geopolitical Plans? Source: Creative Commons

Share this:

Russia is increasing its influence in the region.

What does 1.5 billion euros of Agrokor’s debt mean for a bank as large as Sberbank? In financial terms, the debt is, if not negligible, at least easily managed. In terms of other, more political interests, the situation is completely different. The Russian bank did not finance Agrokor for the sake of the company. Its loans now make it an influential player in the Croatian economy, reports Večernji List on March 19, 2017.

Russia’s Sberbank is not just a financial institution. Since 1841, it has been a mechanism by which first the Russian imperial family, and then Soviet Russia and Russian Federation, have been provided a steady flow of money for wars and military actions, space programmes, scientific research, secret services and large projects.

Several years ago, it took over Volksbank for about half a billion euros and entered the Central European markets, including Croatia. In the meantime, it has changed its ownership structure. The state “as such” is no longer the majority owner; it has been replaced by the central bank of the Russian Federation with 50 percent share, while the remainder is held by various investors.

Nothing is ever left to chance, so it would be naive to think that the Russians did not know from the very beginning what they were getting into with Agrokor. They know the company’s financial status probably better than the company’s chief financial officer. When they were entering business cooperation with Agrokor, the CEO of Sberbank Europe Mark Arnold noted that it was a pretty big deal for them. “Even from the perspective of Moscow this is still a large transaction, but it is also a measure of our success in this market in the last two years. We want to finance the leading companies in this market and in the region”, he commented.

Nominally, as a lender, Sberbank is making every effort to resolve the situation with Agrokor in line with the traditional rules, which may include debt restructuring, takeover of a part of the company, or both. However, any solution definitely must include having confidence in those who run the company – and they definitely cannot be the same decision-makers who have brought the company into the current situation.

According to unofficial information, Sberbank would be ready to provide additional funds to Agrokor only if certain conditions are fulfilled, which include taking control of its operations. The price that Croatia would pay for collateral compromises can only be guessed at this time. Russian primary interests have always been the geostrategic and political influence, as well as energy market. Also, concession rights over water resources and land, and food industry control are not negligible resources. And not just for the Russians.

Russia does not want Croatia to be a bottleneck in its economic channels in Southeast Europe. EU economic sanctions against Russia will probably not last for long and Russia thinks that Croatia should become more open to its companies. “Our foreign trade fell by 50 percent and companies are losing about 50 million euros per year. Last year, trade amounted to just under a billion dollars, but the potential is up to three billion a year,” said recently Anvar Azimov, Russian Ambassador to Croatia, commenting on the sanctions’ effect on Russian-Croatian business ties.

He also discussed the issue of INA. “Our position is now neutral. However, if Hungary and Croatia were to start discussions with Russia, we would consider their proposal. I think they will start talking to us sooner or later, but then we would expect a concrete proposal”, said Azimov. A message for both Agrokor and INA is the same: Russia will not do anything unless Croatia, or its political or economic entities, ask for help. They are convinced that it will happen eventually. In the case of Agrokor, it has already happened.

Photo of the day

From Croatia with Madness

Croatia Traffic Info

  • Due to a traffic accident traffic is flowing alternatly on the DC8 Adriatic road at the place Klanfari, Dramalj area. Due to another one it is proceeding with delays at 319th km of the A1 motorway at Šibenik junction in direction Zagreb. Due to strong wind the driving speed has to be reduced on the A1 motorway from Gospić junction to Sveti Rok tunnel (to 100 km/h) as well as on the A6 Rijeka-Zagreb motorway from Kikovica to Tuhobić tunnel, from Tuhobić tunnel to Ravna Gora junction. During the day difficulties can be expected in roadwork areas - on the A1 motorway after Lučko paytoll at 6th km in direction Rijeka/Split (there is a 1,5-km-long traffic jam). Drivers are invited to keep distance and to adjust the speed to road conditions. With the bad weather the headlights have to be on during the day as well. One lane is free only/traffic is flowing in reduced lanes on the following motorways:-A1 in Plasina tunnel in both directions; -A2 Zagreb-Macelj between Zaprešić and Zabok junctions 20th-18th km in both directions; -A3 Bregana-Lipovac between Kutina and Novska junctions 119th-120th km in both directions; -A6 Rijeka-Zagreb at Svilno viaduct 78th-80th km between Orehovica and Čavle junctions in each direction till 1 June; -A8 in Istria on the section Lupoglav-Učka tunnel. Roadworks on the A4 Zagreb-Goričan motorway (Zagreb detour road): - till 9 June traffic is suspended in the entrance lane of Kraljevečki Novaki from direction Sesvete and Dugo Selo towards Ivanja Reka junction, there is a local detour; in the roadwork area traffic is flowing in reduced lanes; - till 26 April traffic is suspended in the exit lane of Popovec junction from direction Goričan towards Popovec, detour for direction Vrbovec-Popovec: Sveta Helena junction (A4)-Sveta Helena-DC3 Goričica-Belovar-Žerjavinec-Soblinec-Popovec junction, for direction Goričan (A4)-Sveta Helena: Komin junction (A4)-DC3-Sveti Ivan Zelina-Donja Zelina-Žerjavinec-Soblinec-Popovec. Lepenica rest area (at 57th km) on the A6 Rijeka-Zagreb motorway is closed till 15 June, the previous rest area and petrol station is the one Ravna Gora (at 30th km), the next one Cernik-Čavle (17,8 km away from Lepenica). Due to roadworks traffic is suspended: -on the DC1 state road in Lučko and Stupnik (Zagreb); -on the DC8 Adriatic road at Posedarje; -on the DC6 state road, section Glina-Dvor border crossing, detour: Glina (DC37)-Petrinja-Hrvatska Kostajnica-Dvor. Traffic is regulated by traffic signals/one road lane is free only:-on the DC1 state road in Knin until 14 July; -on the DC1 state road at Klinča Sela, Tušilović and Mostanje; -on the DC1 Sinj-Klis Grlo state road at Dicmo; -on the DC8 Adriatic road on the section Kaštel Stari-Kaštel Gomilica, at Podstrana, on the section Zaton Doli-Bistrina, at Srebreno; -on the DC66 Pula-Most Raša state road; -on the DC75 Poreč detour road, section Vrvari-Bijela; -on the DC62 Veliki Prolog-Metković state road at Most Metković.
    Read more
  • During the day difficulties can be expected at the border crossings with Slovenia, Bosnia and Herzegovina and Hungary due to traffic density and occasional additional controls. Freight traffic is heavy at:-Bregana (1,5 hours) and Pasjak (an hour) in the outbound direction, -Bajakovo (3 hours), Tovarnik (3 hours) and Erdut (30 minutes) in the inbound direction. In the inbound bus traffic there is the waiting time of 30 minutes at Klek and Zaton Doli. In the outbound passenger traffic there are delays up to 30 minutes. Due to roadworks at Županja and Slavonski Brod border crossings delays can be expected. At Harmica border crossing traffic is allowed for vehicles up to 7,5 tonnes only.
    Read more
  • The following ferries, catamarans and boats do not operate due to strong wind: -Lopar-Valbiska ferry, -Mali Lošinj-Rijeka, Rijeka-Rab-Novalja, Ubli-Vela Luka-Hvar-Split, Korčula-Hvar-Split, Vis-Split and Zadar-Rivanj-Sestrunj-Zverinac-Božava-Brbinj catamarans, -Mali Lošinj-Unije-Susak boat. Šibenik-Kaprije-Žirje ferry does not stop at Kaprije port.
    Read more

Interview of the week

mod send your news

Photo galleries and videos