January 3 (SeeNews) - Croatia's centre for enterprise restructuring and privatisation, CERP, said it decided to use part of the government's shares in telecoms operator Hrvatski Telekom (HT) [ZSE:HT] and food, beverage and drug producer Podravka [ZSE:PODR] as collateral for a 6.1 million euro ($6.8 million) loan to distressed footwear manufacturer Borovo.
The loan, to be extended by Croatia Banka, will be in the local kuna currency equivalent to 6.1 million euro, CERP said in a statement last month.
Based on the decision, CERP is now authorised to sign a long-term kuna loan with a euro clause with the lender in its role as a provider of the collateral, the statement said.
It provided no further details on the loan terms.
The collateral offered by the government consists of a 0.26% stake in HT worth a nominal 26 million kuna ($3.9 million/3.5 million euro) but valued at 36.8 million kuna at November 26 market prices, and a 1.28% stake in Podravka worth a nominal 20 million kuna, or worth 42.6 million kuna at its November 26 market value, the statement said.
According to January 3 Zagreb bourse data, the Croatian government controls 1.97% of HT via its account at CERP, and has a 5.84% stake in Podravka on its CERP account.
The government has already intervened in the past, in 2017, to help Borovo via pledging a portion of its shares in HT and in electrical company Koncar as collateral for a 46 million kuna loan to state-owned development bank HBOR, aimed at helping the company service obligations to employees and stabilise its operations.
Borovo was a leading footwear producer in Croatia and the region before it ran into financial troubles. Pre-bankruptcy proceedings were launched against it in 2014.
(1 euro = 7.44638 kuna)