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UPDATE 2-Audit shows Croatia's Agrokor 2016 net loss at 11 bln kuna
October 9, 2017 / 2:18 PM / a month ago

UPDATE 2-Audit shows Croatia's Agrokor 2016 net loss at 11 bln kuna

* Agrokor suffers net loss in 2015 and 2016

* Capital value reduced by 22 billion HRK

* Crisis manager presses for criminal charges (Adds details, more quotes)

By Igor Ilic

ZAGREB, Oct 9 (Reuters) - Croatia’s indebted food group Agrokor suffered a net loss last year of 11 billion kuna ($1.72 billion), an audit ordered by the company’s state-appointed management team showed on Monday.

Agrokor, the biggest employer in the Balkans with around 60,000 staff, was brought under state-run crisis management after suffering a liquidity and debt crisis.

The audit, performed by PricewaterhouseCoopers (PWC), also showed net loss in 2015 of 3.6 billion kuna against a net profit of 1.2 billion kuna released by the previous management.

The value of Agrokor’s capital for 2015 and 2016 was reduced by 22 billion kuna.

A presentation by Agrokor’s crisis manager Ante Ramljak also said that “financial irregularities” in 2015 and 2016 contributed to the reduction of consolidated capital value by 5.6 billion kuna.

He said a total asset value in 2016 was 41.8 billion kuna while liabilities amounted to 56.3 billion kuna.

Ramljak told reporters he had pressed for criminal charges against individuals in the company responsible for financial irregularities in the past.

PWC informed the crisis management that irregularities could indicate some “potential illegal deeds”, Ramljak also said.

“Those irregularities include failure to report various operational and financial expenses, wrong classification of borrowed funds and lending as well as inadequate goodwill and value adjustments,” Ramljak said.

Agrokor has yet to make public the overall amount of debt claims against the company. The creditors include suppliers, bondholders and banks, with the biggest portion of debt, around 1.1 billion euros, held by Russia’s Sberbank.

Ramljak said that operational results of Agrokor’s companies in the first nine months of this year had been positive which bodes well for future settlement.

“This what we know now gives us a solid basis for working on a final deal among creditors,” he said.

Analysts expect sale of Agrokor’s retail chains and food producers as well as a considerable writedown on the overall debt. (Reporting by Igor Ilic; Editing by David Evans)

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