March 15 (SeeNews) - Representatives of Croatia's government and parliament have held a meeting with officials of local retailer and food manufacturer Agrokor to discuss the company's financial difficulties and the lowering of its credit rating, the government announced.
The government is thoroughly acquainted with the situation in Agrokor and recognises the company's importance for the Croatian economy, it said in a statement late on Tuesday.
Local media are speculating the meeting was actually held late at night some 10 days ago and was intended to be kept secret.
The government didn't comment on the speculation. In the statement, the government didn't disclose the date and time of the meeting but reiterated its support for Agrokor's management.
"We have been informed the company is making an effort and is considering different options to stabilise its operations. We want it to succeed and will continue to follow the situation closely", it noted.
It is not immediately clear whether the government was considering helping Agrokor by implementing the bailout scenario, for which it would need to seek the approval of the European Commission to grant state aid. In order to make sure no company is given an unfair advantage, the Commission generally prohibits state aid unless it is justified by reasons of general economic development.
At the end of February, Moody's Investor Services said it has changed its outlook on Agrokor from stable to negative, after in January it downgraded its corporate family rating (CFR) on the company to B3 from B2.
Standard&Poor's Global Ratings said earlier this month that it has lowered to 'B-' from 'B' its long-term corporate credit rating on Agrokor, with a negative outlook.
Following Moody's January decision, the company 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.
The government at the time said it was monitoring the situation and expected the owner and management of Agrokor to cautiously answer to the challenges faced by the company.
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 Slovenia's Mercator.