February 6, 2018 / 1:51 PM / a year ago

Croatia govt checks contract with advisers in indebted Agrokor

ZAGREB, Feb 6 (Reuters) - Government experts will scrutinise documents related to the hiring of advisers to Croatia’s indebted food group Agrokor after questions were raised over the appointment of a local firm, Prime Minister Andrej Plenkovic said on Tuesday.

No further steps would be taken in the meantime, he added.

Agrokor’s crisis manager Ante Ramljak submitted the relevant documents to the government this week after local media revealed that the company’s key restructuring advisers, the U.S.-based firm AlixPartners, had hired Ramljak’s former firm as a local consultant in devising the restructuring programme.

“In further decisions I will take into account the whole picture. By an emergency law (on Agrokor) we made a good step to protect the economy, jobs and suppliers. I carry the whole political burden of this process,” Plenkovic told reporters in Strasbourg after a visit to the European Parliament.

Agrokor, which owes roughly 5.5 billion euros ($6.80 billion) to some 5,700 creditors including banks, bondholders and suppliers, aims to restructure its debt into a combination of new sustainable debt and equity.

The biggest employer in the Balkans with around 60,000 staff was put into state-run administration last April and has until July to reach a final deal with creditors to avoid bankruptcy.

According to the media reports, the sum paid to the local adviser amounts to some 240,000 kuna ($39,891.63) a week which some analysts and observers assessed as high for the local circumstances.

“I did not know the amount and at the moment I can say in principle that it’s not good,” Plenkovic said.

Agrokor’s interim council of creditors said they supported the work of the company’s crisis management team and its advisers as they had managed to stabilise Agrokor’s business and pave the way for the final settlement.

According to the current restructuring proposal, the creditors will become 100 percent owners and have full operational control of a new holding company and its subsidiaries. Final percentages of debt recovery have yet to be determined.

The final settlement requires the backing of creditors holding at least 66 percent of the claims. ($1 = 0.8093 euros) ($1 = 6.0163 kuna) (Reporting by Igor Ilic; Editing by Kirsten Donovan)

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