ZAGREB, Feb 15 (Reuters) - Croatia’s indebted food group Agrokor will ask a court for more time to reach a final settlement with creditors as it tries to restructure a 5.5 billion euro ($6.87 billion) debt pile and avoid bankruptcy, the company’s crisis manager Ante Ramljak said on Thursday.
Under an emergency law, the current deadline for an agreement is April 10, 2018, with the possibility of an extension for three months to July at the latest.
“The talks among creditors on the settlement are moving forward. However, we would like to have the permanent council of creditors in place to vote on the settlement proposal and for procedural reasons we cannot have it on time for the April 10 deadline,” Ramljak said in testimony before Croatia’s parliamentary committee for the economy.
Agrokor, the biggest employer in the Balkans with around 60,000 staff, was put into state-run administration last April and has since been trying to reach agreement with almost 6,000 creditors.
In late December the crisis management team presented a draft settlement scheme which includes a debt-for-equity swap in a new holding company owned by creditors and a debt write-off.
Talks are taking place between the team and an interim council of creditors, including local and foreign banks, bondholders and suppliers. The final settlement requires the backing of creditors holding at least 66 percent of claims.
Ramljak said the talks would intensify in coming weeks.
“No one wishes bankruptcy or an alternative route and I believe that we could reach a deal among creditors even before April 10. However, this is also a court process and we need more time for procedural reasons,” Ramljak said.
Creditors have remained tight lipped about the progress of the talks but local suppliers rejected the initial settlement proposal.
Ramljak also said he regretted the choice of a firm where he worked previously as a local consultant in Agrokor’s restructuring process.
“The procedure was not perfect and I‘m ready to draw consequences if the government believes I was wrong. However, at the time when the threat of Agrokor’s bankruptcy was imminent, there was no time to hesitate and I worked with those I had at my disposal,” Ramljak said.
Croatian Prime Minister Andrej Plenkovic recently said the government would scrutinise documents on hiring advisers for Agrokor’s restructuring before taking any decisions.
“Nothing seems wrong in the legal sense, what bothers me is ethical aspect,” he said.
$1 = 0.8015 euros $1 = 0.8011 euros Reporting by Igor Ilic; Kirsten Donovan