Saturday, 1 December 2018

Agrokor's Resilience in Face of Adversity Wins the Day

Agrokor has made a dramatic and unexpected turnaround as bankruptcy and almost total collapse loomed. Having gone from being the most powerful company in the region, to having almost dragged the entire domestic economy to its knees, and then back to proper functioning in just two years, Agrokor's story is a remarkable one, and one of resilience in the face of adversity.

As Poslovni Dnevnik writes on the 1st of December, 2018, Fabris Peruško, Agrokor's extraordinary commissioner, speaks about Agrokor's continued strength and resilience over an extremely difficult period of time.

"Out of the whole series of related, significant events [that took place] in 2018, three key issues are still being identified as breaking ones in terms of the future of the Agrokor Group - the creditors' agreement on the settlement, the hearing at which that settlement was voted for, and, finally, the validity of the settlement with the High Court's confirmation. A significant factor for the success of Agrokor's extraordinary administration was the strength of Agrokor's companies to continue to improve their business, especially their efficiency, in a very turbulent environment.

Their good results are the backdrop of the future and a powerful argument against the uncertainty and fear that followed the process. The importance of the fact that one of the largest restructuring processes in the world has been realised in such a short time and so successfully is still not being valued in the right way.

In just two years, the largest private company in Croatia and the region, without incurring upon one lipa at the taxpayers' expense, has emerged from its pre-government regime, has undergone a demanding financial restructuring through the settlement of more than 5,700 creditors, and instead of crushing the entire economy of Croatia and the region, Agrokor functions well to this very day, provides employment, provides revenue to the state budget and in its relations with its business partners, and respects all of the agreed upon deadlines.

The implementation of the settlement - a process which will be operationally executed by the creditors' settlement agreement - is ahead of us - a very complex business transfer to the new group. The start of that implementation is expected at the beginning of next year, and it should be fully concluded during the first half of 2019, and then we'll get a company bearing a new name and a new corporate culture. The creditors agreed that the future group would be based on three main pillars: retail, food, and agriculture.

In each of them [the aforementioned three main pillars] there is room for improvement, especially in terms of efficiency, so the operational restructuring we've started is also directed at that. The focus is on areas where the value lies.

Synergic initiatives within the group have been intensified, key business indicators have been unified and business reporting and business segments have been drawn up. The function of the treasury as well as the function of human resources have been strengthened.

In terms of retail, we're currently working on standardising the process in all components, there is great food export potential in which we have leaders throughout the region, and in some areas of agriculture, we can become European players. Although there are challenges through refinancing the oldest loan and long-term capital structure, Agrokor has perspective, and all the prerequisites to remain one of the largest companies in this part of Europe."

Make sure to follow our dedicated business page for more on Agrokor and much more.

Thursday, 22 November 2018

Ivica Todorić's Lawyer Speaks Out: "He'll Decide What He Does Next"

Ivica Todorić's attorney, Jadranka Sloković, clarified a few things for N1 on the 21st of November, 2018, with regard to what can be expected next in Ivica Todorić's case, as well as on his planned political engagement, which he himself recently announced, much to the surprise of most.

Ivica Todorić is on parole, who can carry out precautionary measures?

"He'll carry them out himself, because he has to obey them - he has to be at his place of residence, in Zagreb.''

Todorić apparently has the right to free movement in Zagreb, but he mustn't leave the city without the explicit permission of the judge, and he's also had to hand over his passport.

''They will check all of that. He's too much of a well-known person to be able to just go anywhere," explained Sloković.

How is the investigation going, when can we expect the indictment?

"So far, between 60 and 70 witnesses have been questioned," stated the lawyer, which means that there are ''more witnesses than were initially scheduled for the investigation." Witness examination is, therefore, at an end. Problems could arise however, due to the situation being to do with a foreign company.

"We really think that this will be a problem, from knowledge of the language to knowledge of the regulations, which must be applied to certain situations,'' explained Sloković. She added that the result of the assessment is not expected to be arrived to particularly quickly, either.

"It's been announced, and a decision may have been reached now, to extend the investigation for another six months, which means that the investigation will last for at least eighteen months, after which a decision will be made as to whether an indictment will be filed or not, and the indictment may be brought by the prosecutor one month after the investigation has been completed, meaning that that period can be extended for another three months, so there's still a long way to go to the indictment.''

"As for the witnesses who've been questioned up to now - given the fact that this is a non-public investigation, I can't go into [can't discuss] the testimonies, but our stance is that the testimonies don't burden Ivica Todorić in any way whatsoever."

Was custody after extradition necessary, what do you have to say about the bail fee?

"Our position was that no detention was necessary and that everything could be solved with the precautionary measures that are applicable in this case, however, the court's view was that prison was needed, and that could be replaced by bail and precautionary measures. Essentially it was the same decision as that of the court in London,'' explained Sloković, adding that a lower bail amount and different precautionary measures were involved.

Ivica Todorić announced his political engagement, yet before him lies a lengthy court process?

"We still don't know in what way this process will be completed. No matter how optimistically it started, the question is what will be proven during the investigation - it's not certain that an indictment will be filed."

As for his announced political engagement, Sloković stated that such a move is entirely Todorić's decision.

"In one thing he's right - despite Agrokor's difficult destiny, he created respectable firms, there's no burned ground left behind him. He definitely has certain qualities and what he decides to do now is his choice," concluded Jadranka Sloković.

Keep up with all things related to Ivica Todorić here.


Click here for the original interview by N1 Hrvatska

Wednesday, 21 November 2018

Ivica Todorić Leaves Jail: I'll Win Power and Lead Croatia in Right Way

Ivica Todorić paid his million euro sum and has now officially been released from Remetinec prison. How did he come upon such a large amount of cash, you ask? No idea, I respond. In the paradoxical land that is Croatia, everything is impossible and at the same time nothing is impossible, let's just say that.

Now he's free, at least for now, the former Agrokor boss has one or two new ambitions and obviously needs a new career path to venture down now that he's no longer at the seat of the country's largest privately owned company. What better path to take than the one he says ruined him and then conducted a witch hunt against him? Yes, politics.

Todorić's bail fee was set at 7.5 million kuna, and the catch was that it couldn't be paid in any other way except cold hard cash. His lawyers deemed this clause to be a tricky one to bypass, and Todorić's wish to be free seemed to have had cold water poured all over it, until yesterday when he managed to come up with a million euros in cash. You know, as you do.

As Poslovni Dnevnik writes on the 21st of November, 2018, upon being asked just how he came upon a massive one million euros in cash, Ivica Todorić explained that a lot of people who contacted him themselves were ready and willing to help out with the bail fee. 

The first morning after leaving Remetinec prison, Ivica Todorić went to get his hair done. According to a report from 24sata, just as he did before leaving for London last year, Todorić went to one of the capital city's most well known hair salons, located on Bauer street (Ulica Antuna Bauera).

''I've come back with the ''old-new'' hairstyle. As far as bail is concerned, a lot of people helped me out, and they got in touch with me themselves. It's not fair for me to talk all about that now, everything will come to light. I'll win power and start turning Croatia in the right direction, I'm going to the elections,'' said Todorić for 24sata.

Keep up with Ivica Todorić's ever unusual antics by following our dedicated page. Keep up with the Croatian political scene by clicking here.

Tuesday, 20 November 2018

Ivica Todorić Pays Million Euro Bail, Soon to Leave Remetinec

Ivica Todorić has been spending time in Zagreb's Remetinec prison since his extradition from Britain to Croatia to face trial for his alleged crimes in Agrokor, his former company. The trial however, still appears to have no set date, at least not publicly.

Despite his year long attempts and final appeal while living in London to stop the British decision to extradite him having failed, he continued to fight for his right to freedom following his arrival in Croatia, with his lawyers questioning why he needs to be behind bars when he poses no threat of influence over any witnesses.

In response to this, the Croatian authorities have claimed that while that might be true, his flight risk is still very high, especially given his ''trip'' to London, which lasted an entire year, at a very crucial time. Todorić himself still claims this was a pure coincidence, that he had to be in London for business, and that he wasn't escaping anything.

Recently, his freedom had a price of 7.5 million kuna placed on it, and while the former Agrokor boss may indeed possess that in assets, the clause was that it had to be paid in cold hard cash, which looked like it was about to throw a wet blanket on the entire idea. Until today.

As Poslovni Dnevnik writes on the 20th of November, 2018, Ivica Todorić's defense team sent their proposal to Zagreb County Court, and a confirmation of the payment having been paid is now being awaited, according to N1.

What this means is that Ivica Todorić has paid the one million euro bail fee, and Agrokor's former owner will likely soon be released from Remetinec. This information was confirmed to Telegram by a source close to the Todorić family.

Make sure to follow our news page and keep up with all things related to Ivica Todorić here.

Thursday, 15 November 2018

Ivica Todorić's Bail Stands at 7.5 Million Kuna Cash

Ivica Todorić's huge bail sum must be paid in cash. Just some spare change, then?

After a year-long stay in London, which was made up entirely of Ivica Todorić attempting to find a way out of the British extraditing him to Croatia to face trial, the former Agrokor boss returned to his country on the 7th of November, 2018, exactly one year after handing himself in to the Metropolitan police and paying a massive £100,000 bail fee for his relative freedom in the British capital.

His time in London was spent fighting his cause, from texts on his now infamous blog, to creating a YouTube channel and speaking directly to his audience, to then giving exclusive interviews when he felt those methods weren't enough.

Rumours of him having hired powerful British lawyers to help him fight his corner flew around, including one about him having engaged the formidable Michael O'Kane, a lawyer specialising in extradition from the United Kingdom, who has dealt with high profile, complicated cases involving the likes of the Russian mafia. 

It was all in vain, and after several delays and hearings, the British finally extradited the former tycoon back to Croatia. Just says after the order, Ivica Todorić was seen in London Heathrow awaiting a regular Croatia Airlines flight to Zagreb. He was escorted by police, his wife Vesna Todorić was not allowed to sit with him, and on board the aircraft (which was delayed), he was separated from all other passengers. He read English newspapers and ate nothing, drinking only Jana water, which was offered to him by the Croatia Airlines stewardesses. 

Although photography was strictly forbidden on board, some managed, and when Todorić was asked how he was feeling, he said he ''felt good'', which is much more than could be said of his wife, Vesna, who was visibly shaken and provided a statement to those on board that her husband was innocent and that he had misappropriated nothing from Agrokor.

Upon landing at Zagreb's Franjo Tudjman Airport, Vesna went home and Ivica Todorić was taken by the police, away from the main passenger terminal, to a police van which was already waiting for him, and directly to Remetinec prison in Zagreb.

Since being imprisoned, Todorić's lawyer, Jadranka Sloković, who has been with him throughout his ordeal in both Croatia and Britain, have sought bail, claiming that Todorić has no reason to be kept behind bars as he poses no threat of influencing witnesses. The Croatian authorities have in turn argued that while that may be true, there is a risk of flight. His earlier ''trip'' to London confirming that concern.

With that being said, has a potential resolve been reached for the former Agrokor boss? 

As Poslovni Dnevnik writes on the 15th of November, 2018, a bail amount of 7.5 million kuna has been set for Todorić, and if that amount is paid in cash, he can leave Remetinec. Zagreb County Court's spokesman Kresimir Devčić confirmed this.

As stated, the cash amount of 7.5 million kuna must be paid in cash for Todorić to taste freedom before his trial, the date of which still remains unknown as yet.

Follow all you need to know about Ivica Todorić here.

Tuesday, 13 November 2018

Agrokor Rescued and Freed from Most Debt, Awaiting New Owners

At the end of October this year, the Agrokor story drew quiet. Namely, the largest insolvency proceeding in the history of trade law in the Republic of Croatia, as well as the largest restructuring process in Croatia, finally came to an end.

As Marina Sunjerga/VL/Poslovni Dnevnik writes on the 12th of November, 2018, by endorsing the credibility of Agrokor's creditor settlement in late October, the huge process to rescue Agrokor from the pits drew to a close. The rescue of this huge company was an incredibly intense process which has dominated both the economy and the media over the past two years, naturally finding itself among the ''nominees'' for the economic event of 2018.

Over the space of more than eighteen months, agreements between Agrokor's many creditors have been marked by many overtakings, new institutions, political pressure on members of the Government headed by Andrej Plenković, numerous affairs and messy public overthrows. Under the enormous pressure, the company had to manage to somehow continue to do business, which was, in many moments, extremely difficult.

However, thanks to Fabris Peruško, Agrokor's government appointed extraordinary commissioner, and the trust of suppliers in the positive outcome of the whole story, the formerly ailing company has experienced increased profitability and stabilised business.

Most creditors will have to debts of about six billion kuna paid by shares in the ''new'' Agrokor, more specifically the new corporation structure to which Agrokor's assets will be transferred, which will be set up during the next few months of implementing all creditors' arrangements.

Part of the supplier's debt has been billed in cash, and some financial institutions secured part of those claims via refinancing through a roll-up arrangement of up to 1 billion euro. Agrokor, more specifically its sixteen largest companies, posted revenues of 16 billion kuna after the tourist season, with virtually 1.5 billion kuna of operating profit.

Fabris Peruško emphasised that the company was operating better than it was before, and recalled that the deal was agreed with the support of creditors who hold 80 percent of Agrokor's total debts in their hands.

Widespread support for the creditors' deal proposed by the extraordinary administration was the goal that began at a hearing held at the beginning of July this year. To recall, the shares were divided so that the Russian banks Sberbank and VITB held a share of 46.7 percent of Agrokor. The issue of the shareholders' position has still not been resolved, with a settlement reserving 25 percent of the stake in Agrokor, but issues around those assets can only come to trial if they manage to actually prove that their claims that are still being challenged.

Domestic banks received about 12 percent of the company, and the suppliers paid part of the debts with a five percent stake in the new corporate structure. However, thanks to their representatives, Marica Vidaković from Kraš and Marin Pucar from Podravka, they won high-quality positions to continue with their business.

As part of the settlement, there is a guaranteed placement of goods to all of Agrokor's retail chain stores for the next five years, including Konzum, Konzum BIH, Mercator, and Idea. Additionally, if Konzum is operating with operating profits of ess than 40 million over the next four years, it will pay another 75 million euros in cash for the marginal debt.

The implementation of Agrokor's creditor settlement has taken over 100,000 steps, with a workforce of 500 people. It is now necessary to prepare the company for the entry of its new owners, which means that the new corporate structure and new companies will have to transfer over all of their assets, certificates, concessions, labour contracts, brands, and the list goes on,

However, the most demanding business currently in the hands of Agrokor's extraordinary management team is the refinancing of the much-talked-about roll-up loans.

Namely, by the end of December, this one-billion-euro arrangement will come with an eight percent interest rate, but in January, that will jump up to ten percent, and Agrokor will the be required to pay a one-time fee of 75 million kuna to its numerous creditors. By September 2019, that interest would have jumped up to 14 percent. The extraordinary management team hope to refinance the loan by the end of the year.

The various challenges ahead of Agrokor have remain high, since only when the new owners take over the company, set their own people and determine the business strategy, will it be realistically possible to estimate in which way Agrokor's business will affect the domestic economy.

However, regardless of the future of Agrokor, the rescue of the huge company can finally be hailed to have been a successful process which has saved the Croatian economy. With this long and arduous process, a devastating domino effect was avoided, panic was stopped, and the food industry was stabilised.

The fact that most of Agrokor's suppliers recorded a successful business year shows that large companies operating under the Agrokor Group's umbrella have taken the opportunity to consolidate and adapt to new market circumstances. After its long and painful restructuring process, Agrokor remains one of the strongest and most important companies in the domestic economy.

Want to keep up with more news on Agrokor, business and the Croatian economy? Make sure to follow our business page.


Click here for the original article by Marina Sunjerga/VL on Poslovni Dnevnik

Sunday, 11 November 2018

Podravka Delivers Record Results Despite Agrokor's Problems

When Marin Pucar took over Podravka back in February last year, he comically stated, "Once you go Podravka, you're always Podravka!"

As Marina Sunjerga/VL/Poslovni Dnevnik writes on the 11th of November, 2018, Pucar experienced returning to the large domestic food company, at which he worked for twelve years, very emotionally. Pucar also has many goals and plans set up for the huge company to aim for.

Pucar's big plans for Podravka were soon realised because the Koprivnica-based food company achieved net operating profits of a massive 186 million kuna during the first nine months of 2018, which is the best result and the highest operating profit in Podravka's long history. These sparkling financial results saw employee salaries increase by 1000 kuna and the company get closer to reaching its goal of being a food business consolidator in Croatia, these praiseworthy achievements brought Pucar to his very well-deserved nomination for businessman of the year for 2018.

It is also important to point out his engagement in resolving the crisis in Agrokor from his position as the president of the association of Agrokor's suppliers, which acted uniquely to protect the interests of domestic companies.

''Podravka is a very good company'', said Pucar when he came to the head of the company, but added that it can and should be better because Podravka is much more than just its numerous brands and products.

In just a year and a half of his mandate, Marin Pucar has achieved excellent results with his team. He announced Vegeta's strong development, involving a wide range of products. In his vision and strategy, Vegeta will be branded completely with the culinary field, and all kinds of dishes.

''That's the aim, if we succeed, and we believe that we will,'' Pucar said in an interview for Večernji list.

''We'll secure Vegeta for another hundred years, and add new, additional value for Podravka,'' added Pucar.

Among the priorities, Pucar also emphasised the improvement of the rights and the material conditions of employees as the company's most valuable resource. ''Without satisfied workers, there can be no successful company,'' Pucar said. Namely, The salaries of the lowest paid employees in Podravka will increase by about 1000 kuna a month, which is one of the moves other entrepreneurs must follow if they truly want to retain quality workers.

The lowest wage in Podravka now amounts to 4,000 kuna per month. Through a collective contract, Podravka's employees have been granted a jubilee reward, and the company will pay them 1000 kuna per year for voluntary pension savings, which will eventually provide them with larger pensions when they retire. One of the goals that Pucar has set in front of him is, as stated, to position Podravka as a consolidator for the food industry, as well as the generator of the development of domestic agricultural production.

Accordingly, the company is expanding its cooperation with subcontractors and domestic OPGs to ensure that by the year 2022, its global brands such as Vegeta are secure. To achieve this goal requires a two to three year investment cycle, but the capacities needed by Podravka are sufficient to trigger a serious segment of Croatian agriculture. Part of the financing of these investments was secured by the company from EU funds.

Podravka itself has an impressive investment potential of around 200 million euro, so new acquisitions could realistically be expected. The company's presence on numerous traditional markets such as that of Poland, Hungary, and Russia, is set to increase. Pucar also played an important role in the rehabilitation of the formerly ailing Agrokor Group from the position of the president of the Association of Agrokor's suppliers.

The challenge was to protect and preserve the rights and interests of Agrokor's suppliers, while at the same time not compromise the position of Agrokor, and Agrokor's giant Konzum as the largest domestic retail chain. Unlike various other companies, Podravka didn't stop its deliveries to the then suffering Konzum, thereby confirming its responsibility for the continuation of Konzum's operations and the preservation of jobs.

The successful running of this extremely complex process resulted in the stabilisation of Agrokor's operations, a large part of the Croatian economy, and the preservation of Agrokor's supplier stability.

Otherwise, Pucar has spent most of his career in the food industry. He started his professional career at Gavrilović back in 2001, and one year later, he was in Podravka's meat industry, Danica, where he was the director of sales, marketing and development. He quickly moved to Podravka's high position of director for the Croatian market, and from 2008 to 2012, he was a member of the management of the company.

After five years with Podravka, he went to Zvečevo, which he led before returning as Podravka's main man.

Want to keep up with more news like this from Croatia? Make sure to follow our business page.


Click here for the original article by Marina Sunjerga/VL on Poslovni Dnevnik

Saturday, 10 November 2018

Kulmerovi Dvori to Remetinec: How Does Ivica Todorić Spend Time in Jail?

Ivica Todorić returned to Croatia a few days ago following the British decision to extradite him to Croatia to face trial for his alleged crimes within his former company, the gigantic Agrokor Group. Todorić raised the enormous company from its very roots decades ago, employed around 60,000 people, and became one of the most powerful people in not only Croatia, but the wider region. What goes up, however, must eventually come down, and things couldn't have taken more of a 360 turn for the former Agrokor boss if they tried.

From a luxurious life in Kulmerovi dvori up in the hills above Zagreb and gracing the glossy pages of Forbes magazine, to being on the run and appearing as one of Europol's most wanted, to paying £100,000 to the British authorities for relative freedom to live in London on tag for a year, to being extradited to Croatia on a regular Croatia Airlines flight (which was also delayed), and then taken to Zagreb's Remetinec prison. Whoever said life could be predictable? 

Just how does one of Croatia's most formidable characters spend his time behind bars as he awaits trial? 

As Poslovni Dnevnik writes on the 10th of November, 2018, Ivica Todorić, as his wife Vesna said, was actually pleased with the conditions in Remetinec and shares his cell with an individual who is currently serving time behind bars for a fairly petty criminal act.

Todorić and his cellmate must clean up their cell every day, and they do so after getting up at seven o'clock in the morning. For about half an hour after that, which is about as much time as there is between waking up and being given breakfast, which is brought to them in their cell - they have time for personal hygiene and similar things.

Lunch comes at 13:00. If Todorić has any health problems, such as autoimmune conditions, allergies, diseases or intolerances which require a different diet, his menu will be adjusted to him in accordance with a doctor's recommendations. In addition to the menus prescribed by a doctor in the case of potential food issues, prisoners have the right to a religious and a vegetarian menu. For Easter and Christmas, a traditional meal is served, and the daily intake is 3000 calories, according to a report from Večernji list.

After lunch comes time for a rest, and dinner is served at 19:00. During the day, prisoners are provided with a two-hour walk through the prison circle. There are three walkways in Remetinec. The men and the women are separated for this also.

Showering happens at least once a week, it can be more frequent, but it doesn't occur every day.

Television can be watched until 23:00, and on Fridays, Saturdays, holidays, and for the duration of any sort of football championship, for an hour longer. After that time, it's lights out. Visits are on Monday, Wednesday, Thursday and the first and third Sunday of the month, and visitation permission is given by the competent investigating judge.

Find out more about Ivica Todorić here.

Friday, 9 November 2018

Despite Recovery, Todorić's Legacy and Agrokor's Debts Paint Bleak Picture

Ivica Todorić has returned to Croatia after more than a year in London, having landed on the territory of a country in which he is no longer the owner of the largest regional company. Exactly one year after handing himself in in the British capital, living under the watchful eye of the Metropolitan police and after an agonisingly long court battle, Agrokor's former untouchable main man returned to his homeland utterly powerless. A far cry from the not so distant reality Todorić once enjoyed, having once owned his own private island, Smokvica.

As Jutarnji/Vanja Nezirovic writes on the 9th of November, 2018, unlike back on the 10th of April 2017, when he signed Lex Agrokor, which activated the law to allow the Croatian Government to step in and rescue Agrokor, and unlike in the autumn of the same year when he temporarily "emigrated" to London, Agrokor's largest single owner is now Russia's Sberbank with a 39.2 percent stake. The settlement was a long and painfully complex process, however, in order to execute such a settlement, creditors, primarily financial lenders, had to write off a large part of their claims, around 60 percent.

Namely, the exact amount and percentage of the final write-off of the creditor's claims will be known at the time when Agrokor is sold. To recall, on April the 10th, 2017, Agrokor had 7.7 billion euro in debt, of which about 1.5 billion euro was debt within the group, which means that the debt to third parties actually amounted to about 6.2 billion euro.

If we know that the framework calculations of Agrokor's value are projected at about 2.3 billion euro, this would mean that the creditors, primarily financially (based on this nominal projection), were forced to give up an enormous total of about 4 billion euro. This was the price of the survival of Agrokor, which for now, following these write-offs, has a debt of 1.06 billion euro in so-called roll up loans.

Agrokor's medium and large suppliers have so far averaged 60 percent of their claims for goods and services, were paid 500 million euro in cach for old debts, with 46 percent of them having a return of between 80 and 100 percent. When the rest of the debt is paid out over four years, and when part of Agrokor's property is converted, their return will amount to about 80 percent. The bonds' return rate ranges between 40 percent and 80 percent, while the largest number of domestic and foreign financial institutions and other creditors will have an average return on demand of up to 20 percent.

At the time of signing Lex Agrokor, Todorić's Agrokor Group was blocked in the amount of 3 billion kuna, and it was naturally expected that this dire situation could lead to Croatia into a short-term recession. The possibility of Agrokor's bankcruptcy could have, according to CNB/HNB (Croatian National Bank) projections, lead to several smaller banks entering into a very dangerous situation indeed, yet while the banking system luckily remained stable, the losses bigger banks suffered were felt almost immediately.

Even with the implementation of a specially regulated bankruptcy proceeding through Lex Agrokor, several contract suppliers ended up in bankruptcy or having to undertake pre-bankruptcy proceedings, some stabilised the recapitalisation of third parties, some are still awaiting ownership and business restructuring, but a stronger economic and social shock was thankfully avoided.

Today, Agrokor's debt has been reduced to levels that should be viable, things are generally much more stable and the company is expected to return to normal function in 2019. The results of companies like Jamnica and Ledo, are once again very good, Konzum seems to be more than just recovering, but some other companies from within the large Agrokor umbrella, like Velpro and Konzum BiH (Bosnia and Herzegovina) are still very vulnerable.

It's also clear that agricultural companies such as Vupik will need some more time to recover properly, but the overall picture of the company today is much more healthy than it was a year ago, thanks to the current extraordinary commissioner, Fabris Peruško.

That means that the Croatian economy, a much more than significant part of which is made up by Agrokor, has gone from being under grave threat, to being more stable, more safe, and more competitive.

Want to keep up with the latest news and detailed information on Ivica Todorić and his swapping of London for Remetinec prison? Make sure to follow everything here.


Click here for the original article by Vanja Nezirovic for Jutarnji List

Friday, 9 November 2018

From Forbes to Europol: Charges Against Ivica Todorić Reign High

The list of charges against Ivica Todorić are as incredible as they are damning, but will this just be another situation without any real end?

As tportal/Zoran Korda writes on the 8th of November, 2018, just ten days after the British decided to finally extradite Ivica Todorić to Croatia to face trial for his alleged crimes within the giant Agrokor Group, he arrived in the Croatian capital of Zagreb.

After spending the night in Remetinec prison following a regular Croatia Airlines flight to Franjo Tudjman Airport from London Heathrow, the former owner of Agrokor should now go before the investigative judge of the Zagreb County Court, faced with allegations of malversations that damaged his former company for a massive 1.6 billion kuna.

Let's take a look back at just what the charges against Ivica Todorić are.

During the first investigation which launched back in October last year, Todorić, along with his sons Ante and Ivan and another dozen former senior Agrokor managers and auditors, are suspected of multiple criminal acts in doing business, including the forgery of documents.

The main point of the investigation was focused on deception involving financial statements over the last ten years. The initial suspicion was based on the results of a PwC audit, which found that by concealing the real costs and debts, and by overestimating the company's gains, Todorić unlawfully paid the dividend.

This came to a total of 720 million kuna, which was apparently paid to Todorić, more specifically his Dutch company Adria Group Holding BV, for quite a number of years.

Todorić is also suspected of misusing Agrokor's money for the launch of an initial public shares offer (IPO), for collecting fresh capital and listing Agrokor on the London Stock Exchange. The audit found that a sum of about two billion kuna intended for this purpose was mostly used to cover his personal expenses.

The former owner of Agrokor is also charged for withdrawing money from Agrokor to finance his personal financial operations. He is therefore suspected of having embezzled around 650 million kuna in complex financial transactions for the purchase of Agrokor's shares by the European Bank for Reconstruction and Development (EBRD).

A loan of 192 million kuna, approved by Agrokor, was used for interest payments for PIK (payment in kind) bonds, issued back in 2014 for Mercator's takeover. Todorić was formally obliged to return this borrowed money from the future dividends of Agrokor. However, the money was never returned, and the loans didn't present themselves in the balance, but were instead classified as cash.

There is also a suspicion of him having organised the undercover financing of the company through a monopoly business in order to attempt to properly conceal the actual debt situation. In this way, the overall figure was falsely cut by as much as 1.5 billion kuna.

A second investigation was launched in December last year, and that relates to illegal loans which the private investment fund Nexus Private Equity gave to Agrokor back in 2016, through the Nexus company.

In the ongoing legal proceedings so far, the prosecution has examined 16 out of 17 witnesses and can't actually get to the last of them all because the individual in question lives in the Netherlands and is a citizen of that country.

Still to come is the very extensive financial and auditing expertise carried out by the KPMG audit firm, which should be completed by the end of the year.

While it has been reported that Todorić is set to remain in custody for now, owing to an apparent ''flight risk'', the belief still remains that Todoric will likely await his actual trial in freedom, as there is no longer any danger of him or others influencing any witnesses.

Want to keep up with the charges against Ivica Todorić now he's back in Croatia? Stay up to date here.


Click here for the original article by Zoran Korda for tportal

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