Croatian regional retail giant Agrokor in danger of bankruptcy
Agrokor has cancelled a syndicated loan maturing in 2019, which caused its bonds on foreign markets to enter a free fall because the biggest world's banks were in the game.
The company's debt stood at $3.7 billion at the end of Q3 2016, and on top of that Moody's Investor Services downgraded the corporate family rating (CFR) on the company to B3 from B2 and the probability of default rating (PDR) to B3-PD from B1-PD.
The canceled loan, part of a plan to get a 2-to-3 year extension of the maturity of short-term debt of $537 million), is the biggest concern for investors, and analysts say the company should fire 20 percent of its current workforce to stay alive.
"The downgrade reflects our view that Agrokor is not likely to restore credit ratios in line with our previous requirements for a B2 rating in light of the deterioration in operating performance that occurred during the first nine months of 2016", Vincent Gusdorf, vice president - senior analyst at Moody's said in a statement at the time. ■