April 19, 2017 / 2:59 PM / 5 months ago

Ex-Yugoslav republics try to shield themselves from Agrokor crisis

BELGRADE, April 19 (Reuters) - Four former Yugoslav republics agreed on Wednesday to coordinate efforts to save jobs and protect suppliers of Croatia’s Agrokor to shield their own economies from the crisis engulfing the food and retail group.

Earlier this month Agrokor, which employs around 60,000 people in the Balkan region, handed over control to the Croatian state after piling up debts of over $6.4 billion, or six times its equity, during rapid expansion in Croatia, Slovenia, Bosnia and Serbia.

At a meeting in Belgrade, trade and economy ministers from Serbia, Bosnia, Montenegro and Slovenia agreed to form a special ministerial team to work together to monitor subsidiaries of Agrokor, protect suppliers and safeguard jobs, the Serbian Trade Ministry said in a statement.

“Each country will implement controls of financial and commodity flows in companies tied to Agrokor, in line with their respective laws,” the statement said.

On April 13, the government of Slovenia introduced a law to shield its economy from the Agrokor crisis.

Earlier in the day, the Tanjug news agency cited Serbia’s Prime Minister Aleksandar Vucic as saying Belgrade would consider protection of domestic companies owned by Agrokor.

“Serbia will not allow that local companies suffer damages due to Agrokor,” the Tanjug quoted Vucic as saying.

The four ministers also asked Agrokor’s management to appoint independent experts to restructure its subsidiaries and ensure equal treatment of all suppliers. They also sought a meeting with the Croatian government, the statement said.

Agrokor has struck a deal with six lenders, led by Russia’s Sberbank and VTB, to freeze debt repayments and secure an unspecified cash injection before restructuring the business, a process likely to take at least 15 months according to an emergency law enacted to rescue Agrokor. (Reporting by Aleksandar Vasovic; Editing by Elaine Hardcastle)

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