ZAGREB Feb 10 Russia wants Croatian food
company Agrokor to repay its debts to Russian banks, the
country's ambassador to Croatia said on Friday, referring to
concerns about the level of debt Croatia's biggest
privately-held company is servicing.
"We've on several occasions credited Agrokor, believing it
will help stabilise the company. We're not considering fresh
loans," Anvar Azimov was quoted by the state news agency Hina as
"If Agrokor turns to Sberbank for a new loan, it will be
considered in the light of financial difficulties it is
currently facing," he told a news conference when speaking about
the prospects of boosting economic ties between the two
Zagreb-based Agrokor is the biggest food producer and
retailer in the Balkans. It employs almost 60,000 people with
annual revenues of some 50 billion kuna ($7.13 billion). It is
not listed itself, but owns several companies that are. Sberbank
is among its major creditors.
"Agrokor has an intensive and continuing communication with
all of its investors, including those from Russia. At the moment
there are no demands for any further exposure to the Russian
banks," Agrokor spokeswoman Anja Linic told Reuters.
In a recent statement Agrokor said it was servicing all its
financial obligations regularly and would continue doing so.
However, investors have recently voiced concern about the
ability of Agrokor to service easily its forthcoming obligations
amid already high debt. At the end of September last year its
debt amounted to some 45 billion kuna against the capital of
around 7.5 billion kuna.
"I think they might be forced to sell some of its profitable
assets relatively soon," a London-based analyst said.
Agrokor has also been considering an initial public share
In the last 30 days the yield on Agrokor's 2020 bond soared
to almost 22 percent from around 7.5 percent.
IFR news agency reported on Friday that Agrokor's debt
stemmed from an acquisition of Slovenian retailer Mercator,
which was funded with a 485 million euro deeply subordinated PIK
toggle loan in 2014.
PIK toggle notes allow companies to make interest payments
with additional debt if they are short of cash, meaning the size
of the debt can balloon if not tackled quickly.
($1 = 7.0090 kuna)
(Reporting by Igor Ilic; Editing by Elaine Hardcastle)