ZAGREB (Reuters) - Heavily-indebted Croatian food group Agrokor [AGROK.UL] has secured an initial cash injection of 80 million euros (67.98 million pounds) which will be used to repay some of its local suppliers.
The company, Croatia’s largest private firm and the biggest employer in the Balkan region, handed control to the state under an emergency law last week after almost collapsing under debt.
The liquidity boost is below a targeted 150 million euros, but Agrokor’s crisis manager Ante Ramljak said it would be enough for the company to repay some of its debts and operate normally for the next 30 days.
“We will use that time to negotiate a further loan and for that we will talk to a number of potential creditors,” he said.
Ramljak said the initial liquidity boost, likely to be signed on Thursday, was secured with five local banks. Russia’s two top banks and Agrokor’s major creditors, Sberbank (SBER.MM) and VTB (VTBR.MM), opted out as their conditions for seniority status in a previous loan could not be accommodated.
“Dealing with that would consume time which we don’t have as we wanted to secure initial liquidity quickly. From next week we will certainly continue to talk to creditors, including Sberbank and VTB,” Ramljak said.
Sberbank and VTB provided Agrokor with a 100 million euro loan around a month ago.
Ramljak said on Tuesday that Agrokor would need some 450 million euros to operate normally in the next 10 months, during which time the company will be restructured.
Agrokor’s debts totalled around 45 billion kuna (5.14 billion pounds), or six times its equity, according to data from last September, although sources familiar with the situation believe debt has risen further in the last six months.
Reporting by Igor Ilic; editing by Susan Thomas