Russia’s Sberbank has reportedly received bids for its stake in Croatian food producer and retailer Agrokor.
Sberbank CEO Maxim Poletayev told Reuters that bids have so far come from distressed funds, including from the US, Canada and the UK, adding that “everything will depend on the price”.
He revealed that Sberbank is also in talks with a number of banks and funding agencies, including from China and Arab countries, who may take part in refinancing Agrokor’s super-senior debt, which would bear an annual rate of 10% from January 2019.
According to Poletayev, Agrokor has €1.1 billion in the super-senior loan, with Knighthead, Russian bank VTB, and Italy’s UniCredit among its debtors.
Agrokor, which is emerging from a debt impasse, is the largest company in the Balkans with over 50,000 staff.
Last October, a Croatian court approved a debt-for-equity swap, meaning that Agrokor’s biggest single creditor, Sberbank, will soon become its largest shareholder with a 39.2% stake. Bondholders will own 25% of Agrokor after the debt-for-equity swap.
Sberbank and VTB, which have loaned a total of €1.4 billion to Agrokor in the past, said they will not be providing any more funding.
As part of the restructuring plan, Sberbank wants Agrokor to focus on retail, food and agriculture.
Poletayev also revealed that Davis Morris, an ex-executive with UK’s biggest food retailer Tesco, has joined Agrokor to oversee its retail business, while Fabris Perusko, a former McKinsey & Company consultant, is expected to be Agrokor’s CEO.
He pointed out that Agrokor’s Mercator brand, with 985 stores across Slovenia, Serbia, Bosnia and Herzegovina and Montenegro, is continuing to take action to reduce its debt, which amounted to €738 million in the January-September period.
Also, Mercator is to divest some non-core assets and sell real estate assets worth €116 million.
Agrokor is facing increased competition in Croatia from German rivals Lidl and Kaufland who have expanded during the company’s recent troubles.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine