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

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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 The state “as such” is no longer the majority owner; it has been replaced by the central bank of the Russian Federation with 50 percent share, while the remainder is held by various investors.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.

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  • Due to smoke and reduced visibility on the A1 motorway between Gospić and Sveti Rok junctions the driving speed has to be reduced to 80 km/h. During the day difficulties can be expected in roadwork areas. On the A6 Rijeka-Zagreb motorway one lane is free only in Vršek and Lučice tunnels (on the section Ravna Gora-Delnice) in direction Rijeka tonight (23 March) 10pm-6am. In Učka tunnel in Istria one lane is free only every night 10pm-6am till 24/25 March. Tonight (23 March) 8pm-5am traffic is suspended on the A2 Zagreb-Macelj motorway between Trakošćan and Krapina junctions in both directions, detour: DC1 state road. Drivers are invited to keep distance and to adjust the speed to road conditions. 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 Zagreb-Split-Ploče at Božići viaduct in both directions, in Sveti Rok tunnel in both directions till 24 March (driving speed limit of 80 km/h); -A2 Zagreb-Macelj between Zaprešić and Zabok junctions 20th-18th km in both directions; -A3 Bregana-Lipovac between Kutina and Novska junctions 118th-121st km in both directions; -A4 Zagreb-Goričan at Kraljevečki Novaki junction 93rd-94th km in both directions, in Hrastovec tunnel in both directions; -A6 Rijeka-Zagreb at Svilno viaduct 78th-80th km between Orehovica and Čavle junctions in each direction till 1 June, on the section Vrata junction-Vrata tunnel in direction Rijeka till 24 March; -Rijeka detour road in the exit lane of Rujevica junction in direction Rupa; -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; - 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 till 10 April; -on the DC6 state road, section Glina-Dvor border crossing, detour: Glina (DC37)-Petrinja-Hrvatska Kostajnica-Dvor; -on the DC25 Lički Osik-Karlobag state road (at 40th km) 8am-3pm till 24 March. Traffic is regulated by traffic signals/one road lane is free only:-on the DC1 state road at Tušilović and Mostanje; -on the DC1 Sinj-Klis Grlo state road at Dicmo; -on the DC8 Adriatic road at Poličnik, 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. 15 November 2016-15 April 2017 winter equipment is mandatory on the winter sections of the state roads in Croatia (it includes four winter tyres or four summer tyres with chains ready for use).
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