Temporary Creditors’ Council gave Agrokor approval to arrange new financing in the amount of EUR 480 million

Today, the third meeting of the temporary Creditors’ Council was held at Agrokor where the Extraordinary Administration was given approval to arrange a new financial agreement in the amount of EUR 480 million which includes EUR 80 million from the loan approved to Agrokor by domestic banks in April. On top of this amount, additional EUR 50 million is specially foreseen for suppliers as a potential trade credit with refinancing. The total credit amount therefore is EUR 1,060 million, of which the new credit amounts to EUR 530 million, and the remainder is meant to refinance old debt.

The meeting was attended by Marica Vidaković as representative of the “large suppliers” creditor group, Mato Brlošić as representative of the “small suppliers” creditor group, representatives of Knighthead Capital Management, LLC as representatives of the “bond holders” creditor group, representatives of Sberbank as representatives of the “unsecured creditors” creditor group and representatives of Zagrebačka banka d.d. as representatives of the “secured creditors” creditor group, along with Ante Ramljak, Extraordinary Trustee for Agrokor.

Representatives of large suppliers, small suppliers, secured creditors and bond holders voted to approve, while representatives of unsecured creditors withheld their vote of approval. 

During the last couple of weeks, Agrokor actively communicated with many potential investors in order to arrange financing aimed at securing long term stability of Agrokor’s business operations, maintaining value for all company stakeholders and at decreasing systemic risks for the economy of the Republic of Croatia.

Agrokor’s new loan in the amount of EUR 480 million is going to be secured by the bondholders headed by Knighthead Capital Management. Also, a financing tranche on the domestic market will be arranged by Zagrebačka banka (under condition it receives approval from the bank’s committee). Financing will be structured so that all other banks and creditors that meet conditions from the contract will be given the chance to participate in this financial agreement until the end of the month.

New financing will secure sustenance of ongoing business operations of Agrokor and its operational companies. 

Total financing in the amount of EUR 480 million is structured as a long term loan, and the key conditions are 1:1 refinancing of funding lenders’ debt which had occurred before the initiation of Extraordinary Administration procedure based on drawn amounts on new loan and interest of 4% annually accrued to principal or 3.8% cash payable annually. Credit is approved with maturity of 15 months and it will have super senior status pursuant to the Law of Extraordinary Administration.

An amount of EUR 150 million from new financing is agreed to be used for repayment of old debt to suppliers which will positively influence their stability as part of successful fulfillment of the goals of the Law of Extraordinary Administration.

On top of the amount of EUR 480 million, an amount of EUR 50 million is agreed upon for creditors who are suppliers and who can provide goods or services instead of money, under identical terms as financial creditors and achieve the right of 1:1 refinancing of their old debt. 

Most of the new financing will be used to complete preparations for the upcoming season and continuation of regular business operations of Agrokor member companies.

“This is the last credit for Agrokor under Extraordinary Administration, with which we will create preconditions for successful restructuring of the company”, said Ante Ramljak, Extraordinary Trustee for Agrokor.