December 20, 2017 / 6:03 PM / a year ago

Croatia's Agrokor presents draft of settlement scheme

ZAGREB, Dec 20 (Reuters) - The crisis management team at indebted Croatian food group Agrokor on Wednesday presented a first draft of a settlement with creditors which includes a debt-for-equity swap in a new holding owned by creditors and a debt write-off.

“We got support of the creditors to continue working on the details in the next two to three months which will eventually involve final percentages of debt recovery,” the head of the crisis management team Ante Ramljak said.

Agrokor, which has roughly 5.5 billion euros ($6.53 billion) of debt to some 5,700 creditors including banks, bondholders and suppliers, aims to restructure the old debt into a combination of a new sustainable debt and equity.

According to the proposal, the creditors will become 100 percent owners and have full operational control of the new holding and its companies.

“There will be a new holding which will take over a portion of debt it can sustain but for the level of that portion to be determined we first need to complete the assessment of the value of the companies in Agrokor,” Ramljak said.

Agrokor, the biggest employer in the Balkans with around 60,000 staff, was put into state-run administration in April and has until July 2018 at the latest to reach a final deal with creditors to avoid bankruptcy.

The current goal is to get a settlement by April 10, 2018.

Agrokor last month recognised claims worth 41.2 billion kuna ($6.49 billion), but it disputes other claims totalling 16.5 billion kuna, including that of Russia’s Sberbank, its biggest single creditor, because the bank had launched legal action against Agrokor firms in other countries.

The crisis management still hopes to get Sberbank on board for a final settlement.

Agrokor’s domestic suppliers said they hoped for a settlement deal which would involve a haircut of up to 30 percent for them and up to 70 percent for banks and bondholders.

Agrokor’s founder Ivica Todoric, who was detained and released on bail in London last month, and 14 other people are being investigated over the company’s problems.

The final settlement with creditors requires the backing of creditors holding at least 66 percent of the claims. Sberbank alone cannot block the process.

“However, I hope we will earn support of the creditors with more than 90 percent of the claims,” Ramljak said. ($1 = 0.8419 euros) ($1 = 6.3474 kuna) (Reporting by Igor Ilic, editing by David Evans)

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