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Croatian PM wants to shield country from Agrokor's problems

Staff Writer |
Croatia's Prime Minister Andrej Plenkovic said that his government would make sure that debt problems faced by food company Agrokor did not destabilize the country's economy and financial system.

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Zagreb-based Agrokor is the biggest food producer and retailer in the Balkans, employing almost 60,000 people across the region with an annual revenue of some 50 billion kuna ($7 billion).

It is not listed, but shares in some of the companies it owns fell on the Zagreb bourse on Wednesday on worries about the parent company's debt problems.

N1 media on Wednesday claimed that Croatian government officials met on Tuesday with representatives of the Russian state-owned Sberbank to discuss large loans it gave to Croatia's biggest privately-owned company, Agrokor.

"Agrokor is a big company the responsibility for which primarily lies on its owner and management," Plenkovic said. "We are interested that issues related to Agrokor do not have repercussions on the economy and financial system and will do everything to preserve stability," he told reporters.

Agrokor has repeatedly said it will keep servicing its financial obligations regularly as before. But yields on its bonds, listed abroad, have jumped in recent weeks from around eight percent to around 30 percent. A major portion of its debt matures in early 2018.

The company said on Wednesday: "Agrokor is analysing all the possible options for stabilising business ... we have a support among investors that are actively involved in the process and we will timely inform the public about the results."

At the end of September last year, Agrokor had debt of about 45 billion kuna ($6.44 billion) against capital of around 7.5 billion kuna. Agrokor's consolidated 2016 results are expected in late March or early April.

Sberbank supplied Agrokor with two loans in 2014 and 2016 worth 950 million euros, while another Russian state-owned bank, VTB, has also lent the company hundreds of millions of euros. Neither the government nor Sberbank have confirmed the meeting.

“Sberbank is in direct communication with Agrokor. However, we cannot comment in detail on the relationship with our clients," Sberbank told BIRN, when asked about media reports of meetings with government officials.

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