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Business Operations Show Upward Trend, December Marked by Draft Settlement Plan

Agrokor Monthly Report December_2017

Appendix -Agrokor Draft Settlement Plan

The new monthly report on the work of Agrokor's Extraordinary Administration pertaining to the period from December 11, 2017 to January 10, 2018 was published today. During this period the positive trend in business results and the further financial and operational restructuring of Agrokor and its related companies continued.

The revenues of Konzum Croatia and Tisak were above expected levels. Konzum has exceeded expectations in revenues, margin, number of customers and EBITDA, all as a result of the intensive work over the course of previous months. The operations of Tisak followed the same trend, having expanded the offer by new assortment, resulting in improved gross margin and EBITDA. The cost reduction had a major impact on the positive EBITDA trends and the return of revenues enabled the expected profitability to be realized as well. 

Companies from the Food Sector recorded an increase in sales revenues and operating profits (EBITDA) in November in line with expectations. One of the goals was to increase the level of inventories within the scope of preparations for the December holiday season. During the course of November several innovations were launched in the frozen food and oil segments. The companies continued to improve their operating efficiency by way of reducing costs, optimizing the product portfolio and analyzing customer and supplier profitability. 

In the Agriculture Sector November was particularly marked by the growth of sales revenues at PIK Vinkovci, due to increased sales of piglets and beef, crop husbandry products and a better than expected sugar beet yield. The EBITDA margin was significantly higher compared to the preceding months of 2017, as a result of cost optimization at all the agricultural companies and excellent indicators in livestock breeding, high yields of crop and high profitability of the farms. 
The draft settlement plan proposal presented by the Advisors to the Extraordinary Administration and the Extraordinary Commissioner was publicly disclosed on December 20, 2017. The draft settlement plan sets out the path and the next steps required for the extraordinary administration procedure at Agrokor to be successfully completed by a settlement within the time period envisaged by the law. All details pertaining to the draft settlement plan structure can be found at the dedicated sub-website http://nagodba.agrokor.hr/. 

On December 13, 2017 the changes and amendments to registered claims were published at the e-Bulletin Board of the Commercial Court in Zagreb. Apart from the contestations by the Extraordinary Administration, so far 29 contestation submissions have been filed by 15 other creditors, contesting 45 claims which were originally recognized by the Extraordinary Administration. Other creditors have additionally contested a total of HRK 13.1bn of claims. The structure of claims to be comprised in the settlement is extremely complex – around 5,700 Croatian and foreign creditors have filed around 12,000 claims with various orders of recovery as well as legal and factual circumstances. The value of verified claims amounts to around HRK 41.5bn, while the total value of contested claims is about HRK 16.5bn. It is estimated that verified third party claims, i.e. excluding intercompany claims within the Agrokor Group, exceed the amount of EUR 5.5bn, whereof EUR 4.5bn are pre-petition claims while EUR 1.1bn are related to the SPFA.