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Agrokor won't destabilise Croatia's financial system -central bank
March 29, 2017 / 12:59 PM / 4 months ago

Agrokor won't destabilise Croatia's financial system -central bank

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ZAGREB, March 29 (Reuters) - Financial difficulties at Croatia's biggest private company Agrokor will not destabilise the banking system, the country's central bank governor said on Wednesday.

Food producer and retailer Agrokor, whose revenues are equivalent to 15 percent of Croatia's gross domestic product, is laden with debts of 45 billion kuna ($6.5 bln), according to latest data, or six times its equity.

"Croatia's banking system is strong enough to face the toughest situations and it will remain stable despite the developments with Agrokor," central bank Governor Boris Vujcic said.

Croatia's banking system benefited from banks' very high average capital adequacy ratio of 23 percent, he said.

Agrokor has been in debt restructuring talks with its creditors, most notably Russia's Sberbank, its top creditor.

According to local media reports, unconfirmed by Agrokor or Sberbank, a deal on a liquidity injection could be finalised in the coming days.

A major portion of debt, worth 500 million euros ($537 mln), matures early next year.

The Croatian government is working on a new law aimed at shielding the economy and the financial system from the risks of a major corporate failure.

Prime Minister Andrej Plenkovic said on Wednesday the draft law could be approved at a cabinet session on Friday. ($1 = 6.9219 kuna) ($1 = 0.9309 euros) (Reporting by Igor Ilic; Editing by Susan Fenton)

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