Preliminary estimates suggest a range of cca EUR1.8 - 3.8bn of value available to Agrokor creditors

According to the decision of the Interim Creditors’ Council which unanimously adopted the Disclosure Policy at its session on 21 February 2018, the Extraordinary Administration of Agrokor published important information related to the negotiations regarding the settlement plan on its website .

These are the information that were presented to the Members of the Interim Creditors’ Council and their associates, and that are now being presented to all other creditors in order to familiarize them with financial and other indicators that will help them evaluate key points of the settlement plan, in line with the Disclosure Policy.

The published documents are: “EPM Guidebook (Entity Priority Model, EPM)“ and „Summary Information Package as per Interim Creditors’ Council Disclosure Policy “.

The first document is a guide through the Entity Priority Model. The purpose of the Entity Priority Model (“EPM”) is to determine stakeholder claims and respective recoveries at each entity in the Agrokor group under Extraordinary Administration proceedings. The EPM identifies each entity’s distributable value and the legal rights, ranking and characteristics of each of its claims and the EPM Guidebook explains the settings of this model. „Summary Information Package as per Interim Creditors’ Council Disclosure Policy“ constitutes the basis on which the EPM is built and will allow informing the stakeholders on the forthcoming discussions around value allocation. Much of the information is preliminary and potentially subject to material change as settlement plan discussions with the Creditors representatives continue.

Published content displays several groups of information that further explain and help to fully understand the already published draft settlement plan.

This material, for the first time, showcases the Estimated Valuation Summary of Agrokor companies. Estimated value available for the creditors of these companies amounts to a range of EUR 1.8 - 3.8bn. The estimated value for each of the companies is expressed as a lowest-highest range and notes that the distributable value available for creditors in each entity may increase beyond valuations shown below as a result of residual equity value in subsidiaries and recoveries on intercompany loans.

The summary information package also shows the Proposed Pro Forma Corporate & Capital Structure of the new Group. Namely, a major step to deleverage the current business and make it viable going forward is to convert pre-petition debt into equity and structurally subordinated debt instruments. Hence, the document contains a short scheme of the new holding structure owned by the pre-petition creditors, as they will be the ultimate owners of the New Group.

Based on currently available information detailed estimates of the new Group’s post-restructuring capital structure have been published as well. It is preliminarily estimated that up to EUR 530 million of pre-petition claims could be deemed unimpaired and hence reinstated at par (or left unaffected) in the new Group post restructuring. Estimated figures are preliminary and based on the current assumption that collateral value is at least equal to the related claim value for every secured claim. Appraisals of collateral are currently underway and the current estimates of unimpaired (and hence to be reinstated) secured claims above could change materially based on the appraisal results.

Part of the published materials are the amounts of SPFA funds that have been on-lent to various Group subsidiaries and generally have been used to repay pre-petition supplier claims (including border debt) and to fund post-petition working capital.

Further the document contains information about claims secured by guarantees of other companies in the Group, as well as previously published information regarding old and border debt paid to the suppliers. By the end of March, it is estimated that EUR 490 million of old and border debt will be paid to the suppliers, which includes expected further payments of border debt, remaining old debt payments from the Pool B allocation and the fulfillment of the trade tranche of the roll-up facility intended for suppliers. Out of this amount around EUR 188 million refers to repaid old debt and around EUR 302 million are border debt payments, part of which is currently ongoing.