March 19, 2017 / 5:06 PM / a year ago

Croatia's Agrokor works on new business model to resolve debts

    ZAGREB, March 19 (Reuters) - Croatian food group Agrokor,
which is struggling to resolve major debt problems, said on
Sunday it was working on a new business model aimed at
protecting employees, suppliers and other partners.
    Agrokor, the biggest Croatian private company and the
biggest food producer and retailer in the Balkans, came under
pressure from investors and the Zagreb government to clear up
its debt problems, which could destabilise the local economy
    "Management, together with key investors, works on a new
business model which will protect interests of all the
stakeholders, primarily taking care about employees, suppliers
and partners ... The chosen model will be presented soon,"
Agrokor said in a statement.
    It also said that the statement was prompted by inaccurate
information about the company's position that have appeared in
media in recent days.
    Agrokor employs nearly 60,000 people across the Balkans. It
annual revenue of 50 billion kuna ($7.25 billion) in 2015,
around 15 percent of Croatia's gross domestic product. It is not
listed, but some of the companies it owns are traded on the
Zagreb exchange.
    According to the latest data, from last September, its debt
amounted to 45 billion kuna against capital of around 7.5
billion kuna. A major portion of that debt, some 500 million
euros ($537.05 million), will mature in early 2018. One of the
major creditors is Russia's Sberbank          .
    Analysts say the company's troubles came because it expanded
its business too aggressively and relied on risky borrowing. One
option for Agrokor might be the sale of some of its profitable
assets or a change in ownership structure, analysts say.
    The Zagreb-based company is currently controlled by local
businessman Ivica Todoric.

($1 = 6.8930 kuna)

($1 = 0.9310 euros)

 (Reporting by Igor Ilic, editing by Larry King)
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