March 14, 2017 / 8:57 PM / in 9 months

Croatia's government confirms meeting with Agrokor over debt

    ZAGREB, March 14 (Reuters) - Croatia's government said on
Tuesday it had met representatives of local food producer and
retailer Agrokor to discuss efforts to "stabilise its business".
    Zagreb-based Agrokor is the biggest food producer and
retailer in the Balkans, employing almost 60,000 people across
the region with annual revenue of some 50 billion kuna ($7
billion). It is not listed, but owns several companies that are.
    "We have been informed that company is making an effort and
considering various options to stabilise its business. We want
them to succeed and we will continue closely following the
situation," the government said in a statement, without giving
any further details. Local media have said the meeting took
place early this month.
    Moody's and Standard&Poor's recently cut Agrokor's rating on
debt servicing and refinancing risk worries. Moody's flagged
accounting transparency concerns.             
    Given Agrokor's size, some analysts say the government may
have to step in, although local media say the government
rejected that scenario.
    One option could be the sale of some of Agrokor's profitable
    In a recent statement to Reuters, Deputy Prime Minister and
Economy Minister Martina Dalic said the government expected
Agrokor to do everything possible to improve its efficiency.
    Russian banks, such as Sberbank          , are among
Agrokor's major creditors and their share of its debt matures in
early 2018.
    Agrokor has repeatedly said in recent weeks that it will
keep servicing its financial obligations regularly as before.
    At the end of September last year it had debt of about
45 billion kuna against capital of around 7.5 billion kuna.
Agrokor's consolidated 2016 results are expected in late March
or early April.
 ($1 = 6.9982 kuna)

 (Reporting by Igor Ilic; Editing by Ruth Pitchford)

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