Saturday, 28 December 2019

Agrokor Reports Slovenian Competition Agency to EU Authorities

ZAGREB, December 28, 2019 - The Agrokor company has reported the Slovenian Competition Protection Agency to the European Commission and EU competition authorities over the agency's recent moves in connection with the transfer of Mercator's assets from Agrokor to Fortenova.

Agrokor's emergency administrator Fabris Peruško on Friday sent a letter to European Commission Vice-President and Competition Commissioner Margrethe Vestager, Director-General for Competition Cecilio Madero Villarejo and the heads of the competition authorities of the EU member states and members of the European Competition Network, informing them of recent moves by the Slovenian Competition Protection Agency in connection with the transfer of Mercator's assets from Agrokor to Fortenova Group and saying that they were contrary to the laws and practices of the EU and Slovenia.

Peruško drew attention to violations of investors' legitimate expectations with regard to the application of law and practice to investment within the EU, discrimination on grounds of nationality and illegal expropriation of investment within the EU committed by the Slovenian competition agency. He said that these matters were currently before Slovenian courts and that action was likely to be taken before international courts.

The Croatian retail chain Agrokor currently holds a 69.6 percent stake in Slovenia's Mercator. Peruško recalled that in April 2017 Agrokor was placed under emergency administration and planned to transfer its stake in Mercator to the restructured Croatian legal entity Fortenova Group.

"It seems that the Slovenian administration wishes to prevent this transfer for national political reasons and instead orchestrate that the 69.6 percent stake is transferred to a third party. To this end, on 24 September 2019 the Agency imposed a €53.9 million fine on Agrokor because in 2016, when the company was managed and owned by Ivica Todoric, it did not report concentration for evaluation. The Agency used the fine as an excuse to freeze the 69.6 percent stake to prevent its transfer to Fortenova Group. These actions are contrary to local Slovenian law and practice, as well as to EU law and practice, and constitute a breach of international law," Peruško wrote.

He warned that as a result of such actions by the Slovenian administration the ongoing restructuring of Agrokor, including the transfer of Agrokor's stake in Mercator to Fortenova Group, was likely to be delayed or derailed.

This can have considerable implications for the creditors and, in a wider sense, for the EU competition and insolvency regimes, Peruško concluded.

More Agrokor news can be found in the Business section.

Friday, 6 December 2019

Fortenova Official, Slovenian Economy Minister Talk Mercator's Transfer

ZAGREB, December 6, 2019 - Fortenova Group chairman of the Board Maksim Poletaev said on Friday he talked with Slovenian Economy Minister Zdravko Počivalšek in Ljubljana the day before about solving outstanding issues concerning the transfer of the Mercator retailer to the group by the end of the year.

The talks, attended by Sergey Volkov of Sberbank, focused on a model of cooperation so that the outstanding issues over Mercator are solved positively by the end of the year, to which both parties committed, Poletaev says in a press released cited by Slovenia's news agency.

He says both parties have common goals concerning Mercator and are on the same line concerning the inter-dependence of Mercator's local suppliers and attempts to keep the retailer's HQ in Ljubljana for the next few years.

Foretnova's Board will also meet with Slovenia's market competition regulator, whose approval is necessary to transfer Mercator to Fortenova Group, Poletaev says.

The Slovenian Economy Ministry said in a press release that Thursday's meeting between Počivalšek, Poletaev and Volkov discussed a solution which, upon Mercator's possible transfer to Fortenova, would ensure equal treatment for Slovenian suppliers.

Slovenian media said on Thursday that Fortenova had reported Počivalšek to the European Commission over statements which could be interpreted as pressure on a private company in the form of conditions for said transfer.

Commenting on this before Thursday's meeting, Počivalšek said Slovenia was legitimately protecting the interests of its suppliers and that Slovenian laws applied in Slovenia, not Croatia's Lex Agrokor.

More news about Fortenova (Agrokor) can be found in the Business section.

Thursday, 5 September 2019

Agrokor Suppliers Will Take Legal Action So Settlement Is Honoured

ZAGREB, September 5, 2019 - Agrokor's suppliers will take legal action so that the settlement reached for the former conglomerate is honoured, the representative of big suppliers in the Temporary Creditor's Council, Marica Vidaković, said on Wednesday, adding that no agreement had been reached with Fortenova Group on the payment of the border debt and that this was why suppliers were against refinancing a roll-up loan.

She was speaking to the press after the Council, with three votes from financial creditors' representatives, gave its consent to former Agrokor emergency administrator Fabris Peruško to take out a loan to refinance Agrokor's debts. Vidaković and the representative of small suppliers, Mato Brlošić, voted against.

Vidaković said suppliers had pushed for reaching a compromise on the pace of the payment of Agrokor's border debt but that the Fortenova Group leaders were not willing to reach an agreement.

She said suppliers could not support new borrowing as a contract with new creditors contained a border debt payment clause, limiting it to 15 million over euro four years, that was contrary to the settlement.

Vidaković said suppliers believed this morning that a compromise would be reached, under which Fortenova would pay suppliers at least 50% of their claims each year, limiting the amount to 10 million euro per year.

Fortenova CEO Peruško said earlier today that the group had raised its offer for border debt payments this year to 9 million euro instead of 5 million euro, that they had done everything to reach an agreement, but that "some supplier representatives put their own interest before the interests of every other stakeholder in this process."

Asked to comment, Vidaković said the "company's future is actually jeopardised by an individual's possible ambitions" and called Peruško's statement "a potential threat."

The border debt totals 70 million euro and was incurred over two months prior to an emergency administration entering Agrokor. It was for goods supplied whose payment was due on 10 April 2017. Under the settlement, the repayment is to be carried out over four years if the Konzum retail chain's EBITDA exceeds 38.8 million euro. Given Konzum's results last year, suppliers expected the payment of 17.5 million euro.

More Agrokor/Fortenova news can be found in the Business section.

Tuesday, 20 August 2019

Fortenova Asks EC for Concentration Approval in Case of Mercator

ZAGREB, August 20, 2019 - The Fortenova Group, that has taken over the sound segment of the ailing conglomerate Agrokor, has informed the European Commission about its intention to take over the Slovenian chain of shops, Mercator, the Slovenian news agency STA reported on Tuesday.

Agrokor acquired the Slovenian retailer Mercator in 2014.

A source from the group today confirmed that they had notified the EC about its move and the Zagreb-based group started the procedure for a prior concentration approval on 13 August in Brussels.

Fortenova does not want to prejudge the outcome of the control procedure before the EC.

Currently, 69.57% of the Mercator stock is held by Agrokor, Russia's Sberbank holds 18.54%, and the remaining 11.89% is held by various banks and private investors, the local media report.

More news about Fortenova can be found in the Business section.

Friday, 26 July 2019

Fortenova: Over 80% of Holders of Depositary Receipts Vote for New Financing

ZAGREB, July 26, 2019 - The Fortenova Group, the successor to the Agrokor conglomerate, said on Friday that over 80 percent of holders of depositary receipts had voted in favour of new financing led by the US investment fund HPS Investment Partners.

At a general shareholders' meeting in Amsterdam today, over 80 percent of holders of depositary receipts of Fortenova Group STAK Stichting voted in favour of a new financing arrangement for the Fortenova Group to refinance the Super-Priority Term Facilities Agreement of 8 June 2017, the group said in a press release.

New financing is structured as a four-year bond of up to 1.2 billion euro with an interest rate of 7.3 percent, plus EURIBOR with a floor of 1 percent, and is led by HPS Investment Partners. The refinancing process is expected to be completed by the end of August.

The result of the vote shows that a large majority of our shareholders recognised the importance of new financing for the Fortenova Group in terms of ensuring the company's medium-term financial stability and long-term sustainability, growth and development, Fortenova CEO Fabris Peruško said.

He said that after the completion of the transaction, the group's focus would be on increasing profitability and creating added value for all stakeholders.

More news about the company can be found in the Business section.

Tuesday, 16 July 2019

Fortenova Puts on Sale 117 Non-Core Real Estate Properties

ZAGREB, July 16, 2019 - The Zagreb-headquartered Fortenova Group has stated that it is going to sell 117 properties irrelevant for its core business: retail and food and agricultural production.

It says on its web site that it "has started to dispose of non-core real estate and to this end the company has opened a special website in Croatian and English language."

The company explains that "offers for purchase of real estate shall be received in two stages. In stage one, lasting from 15 July to 16 September 2019, non-binding offers will be collected, while the process of receiving binding offers will last from 30 September to 30 October 2019."

The properties listed on the website and intended for sale are divided into categories: residential, commercial, land and other real estate.

The group provides detailed descriptions and condition and terms of sale for each property concerned, along with the starting price and instructions regarding the way of submitting offers for the property in question.

Fortenova was established on 1 April 2019, following the successful implementation of the Settlement Plan achieved between Agrokor's creditors.

"The creditors' Settlement is a financial and ownership restructuring plan achieved during the Extraordinary Administration Procedure conducted at Agrokor pursuant to the Act on Extraordinary Administration Proceedings in Companies of Systemic Importance for the Republic of Croatia," the company recalls.

More news about Fortenova can be found in the Business section.

Tuesday, 2 July 2019

Todorić on Money Withdrawal from Agrokor: That Was My Money

Amid recent reports from the expert witness who revealed his damning findings about just how much of Agrokor's company money the Todorić family used for their own personal expenses, Ivica Todorić, the former owner of Agrokor, hits back publicly.

"The key thing I want to point out today is the fact that the money they're talking about for the fourth time, in what I have to admit is the most totally sensationalist manner, is my money, and I've paid all of the necessary taxes on it," stated the former Agrokor owner and boss.

Ivica Todorić spoke up about the matter in a post after the Croatian newspaper Jutarnji list published a shocking article about how much he and his family withdrew from Agrokor. As expected, Todorić has stated that all of that, and all that we see today, stems from the political need of Prime Minister Andrej Plenković and his government associates to try to hide their illegal, criminal acts surrounding the former Agrokor.

As Poslovni Dnevnik writes on the 1st of July, 2019, here is his statement is transmitted (and translated) in its entirety:

''Over the past few weeks, my team and I have presented a whole host of new evidence on the criminal acts carried out by the Prime Minister of the Republic of Croatia, Andrej Plenković, and his associates (the Borg Group and others, who've been very specifically mentioned), and we've presented what is, so far, the most comprehensive record of the crimes that took place within Agrokor. That document also has a number of high-profile addresses in the European Union in it.

The first thing I want to say to you, Mr. Plenković, is that you can see that Agrokor is not "PASSE".

Secondly, Mr. Plenković, the Agrokor affair and the Borg affair are the biggest corruption affairs in the history of this part of Europe, and you know that yourself today, as do the citizens of the Republic of Croatia, as does the region and the rest of Europe, they know it very well.

Thirdly, it's obvious that the fact that you've become a burden to yourself bothers you a lot, and with the same intensity, it probably bothers you a lot that you've become a political and legal bomb for the EU. If the content of ''findings'' published on the front page of a certain newspaper is true, then those findings, as I've already said, are fictitious criminal documents, perhaps also falsified, they're just your regular professionally created rubbish.

Everything we see today stems from the political need of Prime Minister Plenković and his associates in an attempt to try to hide their illegal, criminal acts. They're so afraid that they obviously don't understand how their attempts to conceal annihilation are failing because everything is on the table, and around the world, too.

The key thing I want to point out today is the fact that the money they're talking about for the fourth time, in what I have to admit is the most totally sensationalist manner, is my money, and I've paid all of the necessary taxes on it. Therefore, nobody ''took'' anything, that was my money, Becase Agrokor was a private company from 1989 until April 2017. I personally had private money there in accordance with the law, and I paid my taxes on that money correctly.

The Government of Croatia, governed by Andrej Plenković, is breaking down and is continuing with this fake news about me and my family, repeating the same untruths for the fourth time, to draw attention away from the enormous amounts of disturbing affairs, specifically from the recent HNS request for the dismissal of Minister Lovro Kuščević, and what's obviously for them a very unfavourable development of events surrounding the constitution of key EU bodies.

So, to repeat, I spent my private money, and Plenković and his associates have stolen someone else's money.

Obviously today in Croatia, under HDZ, not only can criminals nationalise and loot a private company with the use of an illegal law, but also decide who can do what with their own money which they've duly paid their taxes on.

I'm sure this won't go on for much longer.''

For more information on Agrokor (now Fortenova), Ivica Todorić and much more, follow our dedicated business and politics pages.

Monday, 1 July 2019

Ambassador: Russian Banks Have Played a Constructive Role in Fortenova Group

ZAGREB, July 1, 2019 - Russia's Ambassador to Croatia, Anvar Azimov, said on Monday that the situation at the Fortenova Group, previously called Agrokor, was stable and that Russian banks Sberbank and VTB had played a constructive role in ensuring the present stability.

Azimov was speaking to the press on the sidelines of the Zagreb-Moscow economic forum at the Croatian Chamber of Commerce.

Asked if the Russian interests in the Fortenova Group were well protected and if the Russian side was satisfied with the new company's leadership, he said that the situation was good and that both sides were pleased.

"The new company is stable. We are hoping for a good profit," Azimov said.

Asked if Sberbank, the main creditor of the former Agrokor food and retail conglomerate and now the single largest shareholder in the new company, would remain in Fortenova, the ambassador said he did not know how long it would stay, adding that he does know that it is present and involved.

Azimov said that "the problem has been solved" and that Sberbank and VTB had played a constructive role in it.

More news about Fortenova Group, the former Agrokor group can be found in the Business section.

Tuesday, 14 May 2019

Agrokor: Net Losses Reduced Substantially in 2018

ZAGREB, May 14, 2019 - The Agrokor Group in 2018 earned consolidated audited revenues in the amount of 38.8 billion kuna, 1.8% down from the year before, while its operating profit grew strongly to 2.39 billion kuna and net losses dropped considerably in comparison to 2017, to 1.4 billion kuna, shows a report the group released on its website on Tuesday.

The consolidation covers 108 companies in which Agrokor has a controlling interest, of which 53 are in Croatia.

The group's consolidated revenues of 38.8 billion kuna are 712 million kuna or 1.8% down from 2017. Operating expenses dropped by 10.9% or 4.7 billion to 39.2 billion kuna.

The group's loss after taxation was 1.4 billion kuna, which is much less compared to the 2017 loss of close to 6.1 billion kuna.

Agrokor's extraordinary administration points to a strong increase in operating profits of 22% to 2.4 billion kuna, which is 427 million kuna more than in 2017. The growth in operating profits is owing to restructuring that has been launched in all business segments of the group, both in terms of revenue and in terms of expenditure.

The biggest generator of growth of operating profits were the retail and wholesale segments, namely the Konzum and Mercator retail chains.

The operating profit in the Retail and Wholesale segment totalled 1.2 billion kuna, an increase of 681 million or 133%.

The extraordinary administration said that the drop in revenue was mostly due to the Agriculture business segment recording a decline in the volume of trade in agricultural produce and lower market prices of fattened animals and semi-hard cheese as well as due to a drop in sales revenues of the Retail and Wholesale segment.

The Retail and Wholesale segment in 2018 earned sales revenues in the amount of 29 billion kuna, 3.9% less than in 2017. The drop was due to competitors' opening new production areas in Serbia and Montenegro, the Extraordinary Administration said.

It noted that the drop in revenues due to the closure of nonprofitable Konzum stores was compensated for with an increase in revenues of 5.7%.

The Food business segment in 2018 posted operating revenues in the amount of 1.2 billion kuna, an increase of 3%. The business revenues of that segment were down 106 million kuna or 1.2%, totalling 9.1 billion kuna.

The Agriculture segment earned revenues in the amount of 2.3 billion kuna, a drop of 18.6%, while operating profits totalled 113 million kuna, down 60%.

The extraordinary administration said that 2018 saw Agrokor's creditors close a debt settlement plan that was implemented in the first quarter of 2019.

The group's financing was stabilised through the extension of the Super-Priority Term Facilities Agreement (SPFA) loan and preparations for its refinancing.

Priorities for this year are the already launched process of refinancing the SPFA loan, operational restructuring and the elaboration of a new strategy for the Fortenova Group (the new name of the Agrokor Group, under which it started operating on April 1), the Extraordinary Administration said.

More news about Agrokor can be found in the Business section.

Sunday, 21 April 2019

Croatia's Fortenova Group Collaborating with Cambridge University

Close cooperation between Britain and Croatia as Cambridge University students join forces with the Fortenova Group.

As Poslovni Dnevnik writes on the 18th of April, 2019, consultants from the University of Cambridge are working on a project to find the best solutions in the field of artificial intelligence and automation for Fortenova's operative companies. It seems that Croatia's Foretnova, the former Agrokor, is entering a new era indeed.

Fortenova Group's values ​​also include a leading role in the implementation of new technologies and cooperation with leading educational institutions in Croatia and across the world. Within this direction, Collaboration with the University of Cambridge, whose team of consultants, presented selected solutions in the field of artificial intelligence and automation to the management of the operative companies of the Fortenova Group. At the same time, companies with great potential to be partners of Fortenova in this area were presented.

Today, artificial intelligence and automation are used in 40 percent of large retail chains and consumer goods manufacturing companies, and it is expected that by 2021, their share will grow to as much as 80 percent. Since these solutions have a significant impact on both revenue and company operating costs, their implementation is totally unavoidable in any company that wants to really be competitive and a have a chance at being a market leader.

Therefore, Fortenova's management has started collaborating with the esteemed British Cambridge University in order to find proper solutions in the field of artificial intelligence and automation that have the greatest potential.

The collaboration of Fortenova's management team and a team of consultants from the University of Cambridge resulted in a detailed review of the international ''ecosystem'' of artificial intelligence and automation and a short selection of potential solutions, and after that, a meeting with the management teams of Fortenova's operative companies and an attempt at identifying the solutions with the greatest potential for application in those companies in the future took place.

Preferred solutions come from the field of image recognition, frameworks, image optimisation, shop-based optimisation on customer-led shopping, advanced customer analytics, which are focused on personalised access and micro segmentation, an extensive insight into market trends and the needs of consumers, and finally, inventory management optimisation. The team of consultants from the University of Cambridge will elaborate business cases for selected solutions in the next stage, followed by the implementation of the chosen pilot project.

Dragan Mrkajić, Fortenova's strategy director said on this occasion: "This cooperation supplements Fortenova's values, which wants to be a leader in the implementation of new technologies and to broaden its cooperation with educational institutions both in Croatia and the rest of the world. As leaders in its business areas, we're privileged to be able to cooperate with Cambridge University's MBA study consultants, as this business management study is considered to be the world leader in education. I consider this cooperation to be extremely productive and useful to our company, as it will definitely bring added value to our way of selling our products and the services we offer to our customers, as well as our supply chain.''

Ivan Babić, director of Fortenova's transformation, expressed his satisfaction with selected solutions: "The quality of final solution choice largely depended on the fact that consultants from the MBA study at the University of Cambridge were able to gain a comprehensive understanding of the way Fortenova does business. This was of crucial importance to the success of the project, including its organisational structure, its business objectives, its operational business and its product portfolio. The project has brought significant benefits to both sides in understanding key global trends, players, and case studies where artificial intelligence has improved business performance in the retail and food industry.''

Antonija Kožul, senior project manager at Fortenova, said: "The gathering together of the best talent and the most advanced technologies together with the enthusiasm of Fortenova's operative companies in their adoption make up the fundamental values ​​of our group. This project is about just that and this is precisely why I consider it to be a privilege that I'm the head of it."

Chayanika Ranasinghe, an MBA consultant from Cambridge University, described the collaboration as follows: "I was very interested in participating in this unique transformation which the Fortenova Group has begun to work on, with a highly motivated and dynamic team.''

Shuntaro Horiuchi, an MBA consultant from the University of Cambridge said on this occasion: "The Fortenova Group's project is striving to introduce new value in established and sophisticated work based on the latest technologies. I'm excited to have had the opportunity to take part in this ambitious project and I expect that this opportunity will accelerate further increase of value for buyers.''

Slaven Štekovic, an MBA consultant at the University of Cambridge, also stressed the regional impact of the project: "The focus of the Fortenova Group's introduction of state-of-the-art technologies in its business to enhance value for its customers was a key factor which motivated me to join this dynamic and intellectually stimulating environment. Along with the experience I've gained at the core of some of the leading high tech innovation projects, I recognise the tremendous value of cooperation with such an influential company in building a pilot project for the entire region of Central and Eastern Europe, and South East Europe.''

This project is the beginning of collaboration between Croatia's Fortenova Group and Britain's University of Cambridge, which will continue in the future through the transfer of knowledge, experience and the best business practices.

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

Page 2 of 3