New Fortenova Group owner to sell off food production companies to resolve debts

As of Tuesday, Pavao Vujnovac is the new majority owner of the Fortenova Group food goods company and the legal successor to the Agrokor Group. Vujnovac paid some €470 million for an almost 94% stake in Fortenova, while the remaining 6% is owned by more than 80 minority shareholders.

The takeover means that Russian banks VTB and Sberbank, which fall under the west's sanctions against Moscow, are no longer part of the company's ownership structure. It has also finally settled debts Agrokor, subsequently Fortenova, owed to suppliers. However, Fortenova will now have to refinance 1.2 billion euros in bonds issued at an unfavourable interest rate of 7.3 percent. Here's what new owner Pavao Vujnovac had to say: “So far we have had talks with banks and other potential institutions to refinance that debt. However, as a result of this process and the sanctioned shareholders, we have not, up until now, been able to enter into any concrete discussions. But, I wouldn't say that we won't have any options.”

Part of the debt will be resolved through the sale of Fortenova's Agrara group of companies, which includes strategic food producers such as Vupik, Pik Vinkovci and Belje, the biggest food goods company still in Croatian hands, Podravka, has made a bid for their purchase. The president of Podravka's Management Board, Martina Dalić: “We believe that we have submitted a good, attractive and stimulative offer, but obviously the decision is on Fortenova.”

Vujnovac explained who will ultimately have the final say in the process: “The entire process of selling Agrara is being led by the management board, and after analyzing the submitted bids, it will likely, in a short period of time, come out with the best offer. It should be noted that the entire process of selling this business is being monitored by the American HPS fond as the biggest creditor. Their interest is that the bid that is accepted is the biggest bid.”

However, one of the 80 small shareholders in Fortenova, Neven Vidaković warned that this will mean selling off food producing companies of strategic importance: “The frozen foods segment has already been sold, now they're selling the food production segment, what remains is water and retail chains. So, there's not much left to sell. Right now we have food production that someone is selling off. This is far too big a strategic problem for the country to leave it to just anyone. It is precisely this sale that is in a way a test of statehood.”

Vidaković also warned that there is another possible problem facing the state, as it could lose the legal proceeding launched against it by Agrokor founder Ivica Todorić, after it adopted emergency legislation allowing government to strip him of ownership of Agrokor.

Source: HRT