March 22 (SeeNews) - The largest suppliers of Croatia's Agrokor are angered over the lack of communication with regard to the financial issues of the privately-held concern, the government said.
Economy minister Martina Dalic and agriculture minister Tomislav Tolusic hosted a sit-down with 19 of Agrokor's suppliers on Tuesday, following reports that the suppliers were being excluded from the concern's restructuring plans.
"We listened to the problems and viewpoints of suppliers on the situation in Agrokor", Dalic said in a statement issued by the government. "We expect the board and the owner of Agrokor to come up with a solution to the difficulties in business, one which protects the interests of the employees, suppliers and partner companies".
She noted that the suppliers' demands, which include better communication with Agrokor and banks, are supported by the government.
"Suppliers, as a key link in the future of Agrokor, must be involved in discussions over the restructuring plan, which at the moment is not the case", Dalic explained.
Despite the fact that Agrokor is a privately-held company, the government has the right to demand that the company's management establish better communication with its key suppliers and partners, she concluded.
Earlier this month, Agrokor said it is working on a new business model which will protect the interests of all its stakeholders.
"The position and viability of Agrokor and its companies are not in question," the company said in a statement over the weekend.
According to Croatian media reports, Russian banks, including Sberbank, may shortly acquire a stake in Agrokor and launch an overhaul.
In January, Moody's downgraded Agrokor's corporate family rating (CFR) to B3 from B2. A month later, the ratings agency changed its outlook on the company from stable to negative. Following Moody's January decision, Agrokor pulled out of a syndicated loan deal it had struck with several international lenders, which sent the price of its bonds on international markets into a downward spiral.
Standard&Poor's Global Ratings also said earlier this month that it has lowered to 'B-' from 'B' its long-term corporate credit rating on Agrokor, with a negative outlook.
Croatian media have been speculating that Agrokor will need to sell off a number of its affiliates in order to service its obligations, which include a PIK loan it took out in 2014 to fund its acquisition of Mercator.