Ivica Todoric activates “Lex Agrokor” – Extraordinary management takes over running Croatian giant

The management of Agrokor, headed by Ivica Todoric, filed a request this Friday, April 7, to the Commercial Court of Zagreb for activating Lex Agrokor, i.e. the Law on Extraordinary Management Procedure in Commercial Companies of Systematic Importance to the State.

– I’ve reached the said decision confident that it is the best interest for each individual employee, partner, supplier, all other participants and the entire economy – Ivica Todoric sad and invited “all those who can contribute to Agrokor’s uninterrupted continued operations, to saving jobs and enabling further development to do everything in their power for this to be realized”.

Todoric thanked the employees, his close associates and partners, with whom, as he pointed out, he had built the most important company in Croatia’s history.

– I’ve invested forty years of my life in building Croatia and the region and I am a proud man today, as everything I had built I transferred today to the state of Croatia – Todoric said.

He said that he had given his best in order to secure the company’s stability, keep more than 60,000 jobs and enable the Agrokor concern to prosper.

The Croatian Parliament previously adopted the Law on Extraordinary Management Procedure in an urgent procedure. The law enables the extraordinary management procedure in companies with over a billion euros in debts and 5,000 employees.

At the government’s suggestion, the Commercial Court appoints an extraordinary commissioner representing the debtor. It is still not known who this might be. The commissioner may have deputies and selects a restructuring advisor within 30 days of their appointment. Optionally, auditors and other advisors are appointed as well.

An advisory body of five is formed, containing a representative of the workers, and the creditors’ council is formed as well. The extraordinary management can last for up to 15 months, and, if the stabilization and restructuring process fails, the company goes into bankruptcy.

Following the adoption of the law, Chief Restructuring Officer of Agrokor, Antonio Alvarez, who represents the banks, said that the banks were prepared to finance the concern’s operating needs, provided that the funds are prioritized within Lex Agrokor.

The Law includes an amendment saying that the new creditors, financing the debtor in the extraordinary management procedure, shall take precedence in reimbursement, even in case of failure of extraordinary management procedure, that is, in case bankruptcy proceedings are initiated.

The suppliers previously decided to stop the deliveries to Agrokor stores, with bread and milk being the exception. This will remain in effect until the suppliers meet the bankers and reach agreement on what their next steps should be.

Fortenova grupa d.d.

Trgovački sud Zagreb

Vlada Republike Hrvatske

Agrokor

Ivica Todoric

Commercial Court of Zagreb

Lex Agrokor

Law on Extraordinary Management Procedure in Commercial Companies of Systematic Importance to the State of Croatia

Agrokor operations

Government of Croatia

Antonio Alvarez