June 19, 2018 / 11:47 AM / 2 months ago

UPDATE 2-Creditors of Croatia's indebted Agrokor back settlement deal

(Adds details of the deal)

ZAGREB, June 19 (Reuters) - Key creditors to Agrokor have unanimously backed a settlement deal for the indebted Croatian food producer and retailer that includes a debt-to-equity swap and some loan write-offs, the company’s crisis manager said.

A local commercial court now has to assess the deal and give its approval. Representatives of the creditors will then meet again and 66.6 percent must support the deal to make it valid. The deadline for that vote is July 10.

Agrokor, the largest company in the Balkans with 60,000 staff, was put under state-run administration in April 2017, crippled by debts built up during an ambitious expansion drive.

Agrokor’s debt is some 58 billion kuna ($9.1 billion), while its current value is seen as a third of that. Its creditors include local and foreign banks, bondholders and suppliers.

Under the deal, the biggest single creditor Russia’s Sberbank with loans worth 1.1 billion euros ($1.3 billion), would become the firm’s largest shareholder with a 39.2 percent stake, crisis manager Fabris Perusko said.

A document outlining the deal showed the return on Sberbank’s debt would be 52 percent.

Bond holders, local banks and Russia’s second largest bank VTB would end up with stakes of 25 percent, 15.3 percent and a 7.5 percent, respectively. The rest would be owned by suppliers and international financial institutions, Perusko told reporters.

Agrokor’s crisis management team said last month that Agrokor would be taken over by a new Dutch-based company owned by creditors that will be called Aisle Dutch TopCo.

“I deeply believe the deal will be supported ... in order to enable the company’s normal functioning,” Perusko said.

$1 = 6.3921 kuna $1 = 0.8649 euros Reporting by Igor Ilic Editing by Louise Heavens and Edmund Blair

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