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Bosnia's Federation adopts decree to shield itself from major corporate collapses

Author Maja Garaca
Bosnia's Federation adopts decree to shield itself from major corporate collapses Author: Radomir Ralev

SARAJEVO (Bosnia and Herzegovina), October 20 (SeeNews) – The Federation of Bosnia and Herzegovina said it has adopted a decree on extraordinary administration in companies of systemic importance for the entity with the aim to protect its economy from major corporate failures.

In order to fall within the scope of the decree a company must employ more than 1,000 people and have annual revenue of over 500 million marka ($301.8 million/255.6 million euro), the government said on Thursday, following its weekly session.

Currently, there are five such companies in the Federation, it added without naming them.

Thе decree does not apply to financial institutions, banks, investment funds, retirement funds, insurance and reinsurance companies, leasing companies and microcredit organiяations.

The extraordinary administration implemented under the decree can last up to six month, the government explained, adding that the document was put together in light of the financial downfall of Croatia's biggest retail and food concern Agrokor, which has several units in Bosnia and employs over 5,000 people.

"At present, 1,300 suppliers are directly threatened. Konzum owes them some 130 million marka, of which 60 million marka is made up of due liabilities, while the number of indirectly endangered suppliers is far greater, and counts over 2,000 in the dairy industry alone", the government explained.

The Federation is one of the two autonomous entities forming Bosnia and Herzegovina. The other one is the Serb Republic.

(1 euro=1.95583 Bosnian marka)