Slovenian retailer Mercator agrees debt deal ahead of Agrokor's takeover

LJUBLJANA, April 25 Fri Apr 25, 2014 11:45am EDT

LJUBLJANA, April 25 (Reuters) - Slovenia's largest food retailer Mercator said on Friday it had reached a deal on restructuring its 1 billion euro ($1.38 billion) debt with creditor banks, clearing the last hurdle for its takeover by Croatian rival Agrokor.

"The creditors gave strong support to Mercator which provides stability needed for the group's financial restructuring," Mercator said in a statement without revealing details of the deal.

Mercator's owners include the heavily indebted brewery Pivovarna Lasko and Slovenia's biggest local bank, NLB, one of five lenders the government had to rescue with a 3.3 billion-euro capital boost in December.

Agrokor, Croatia's top food producer and retailer, will acquire 53.1 percent of Mercator from a consortium of 12 Slovenian firms and banks, paying 86 euros ($120) per Mercator share - down from a previous offer of 120 euros per share - which values Mercator at 323.8 million euros.

Agrokor will also boost Mercator's capital by 225 million euros - 200 million immediately to repay its debts to banks and the remaining 25 million euros to boost working capital.

The transaction deadline is June 30, 2014.

Agrokor signed a deal to buy the majority stake in Mercator last June, but then demanded that Mercator first reached an agreement on how and when to restructure its debt.

Regulators in Slovenia and Croatia, both members of the European Union, have cleared the deal but the Croatian watchdog has ordered Agrokor to sell several dozen of its retail shops.

The new company will have revenue of 7 billion euros and employ 60,000 people, Agrokor said last June.

Mercator shares closed 1.32 percent lower at 75 euros on Friday.

($1 = 0.7240 euros) ($1 = 0.7236 Euros) (Reporting by Zoran Radosavljevic and Igor Ilic; Editing by Sophie Walker)

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