Wave of Lawsuits Hits Agrokor

By , 11 Aug 2017, 11:43 AM Business
Wave of Lawsuits Hits Agrokor Source: Agrokor

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The government-appointed extraordinary commissioner has admitted for the first time that numerous legal proceedings have been launched against Agrokor, both in Croatia and abroad.

Over the relevant period, a series of court and enforcement proceedings against Agrokor and related companies have been formally instituted, claims the latest monthly report issued by the Agrokor’s government-appointed administration and submitted to the Economy Ministry. The report, as usual, also presents the situation in all business segments (trade, food and agriculture), what has been done so far, and what are the results of the management’s efforts; but this is the first time that a monthly report indicates that the wave of lawsuits has begun, reports Jutarnji List on 11 August 2017.

In addition to previously announced proceedings, such as the enforcement proceedings initiated by Sberbank Ljubljana in Slovenia, which have been interrupted due to the “Lex Agrokor,” as well as proceedings due to other financial obligations, creditors and credit agreements before the courts of Serbia and Montenegro, extraordinary commissioner Ante Ramljak has for the first time announced that three arbitration proceedings have been initiated in London.

According to sources, all three arbitration proceedings have been launched by Sberbank from Russia, due to three loans which were approved to Ivica Todorić, Agrokor’s owner and former CEO. The total amount of loans involved in the arbitration proceeding is more than a billion euros. This is just the beginning of a difficult legal battle in which Russians will try to secure a better position for collecting their claims. The Croatian side is trying, just like it did in Slovenia, to ask Britain to recognise Croatia’s “Lex Agrokor,” that is, the jurisdiction of the Croatian judiciary in the dispute with Sberbank.

As far as business operations are concerned, retail and wholesale sector companies (Konzum, Tisak and Velpro) are still experiencing significant problems with their liquidity, low stock levels and negative market perceptions, as well as a significant drop in the number of customers compared to the period prior to the opening of the extraordinary administration procedure. They had revenues in the amount of 7.3 billion kunas, but no profits.

However, the emergency management is relying on a good tourist season and claims that the number of customers has been recovering in recent weeks since the latest loan was received, and that it is approaching the numbers from previous years. “We are constantly working on cost optimisation and restructuring measures aimed at improving the results,” says Ramljak.

In the food segment, which includes companies such as Jamnica, Ledo, PIK Vrbovec and Zvijezda, revenues reached nearly 4 billion kunas, while the agricultural sector (Belje, PIK Vinkovci and Vupik) had revenues of 1.3 billion kunas.

The commissioner argues that significant progress has been made with regards to the group's sustainability plan and adds that initial draft plans for the restructuring of five business segments and nine subsidiaries have been prepared.

However, in order to provide a reliable and secure basis for the preparation of a financial plan for 2017 and the later period, it is necessary, according to Ramljak, to conduct a thorough audit of the previous business results and financial statements.

Translated from Jutarnji List.

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