LJUBLJANA (Slovenia), August 31 (SeeNews) – Slovenian retailer Mercator said on Thursday the formal basis for its re-entry into the Bosnian market has been approved by the board of creditors of its parent company, Croatia's ailing food and retail concern Agrokor.
The transfer of possession and establishment of retail operations in 83 stores in Bosnia and Herzegovina, currently run by Mercator's peer Konzum, will take place gradually, Mercator said in a Ljubljana bourse filing.
"Re-entry is based on positive experience from the period when Mercator managed its stores in Bosnia and Herzegovina. Integration after Mercator's acquisition has resulted in a drop of revenue and had a direct negative impact on business efficiency of retail in this market," Mercator explained.
At the same time, the retailer noted, the board of creditors adopted commitments to Konzum's restructuring in Bosnia, where it will manage 156 of its stores in the future.The restructuring foresees a capital increase of the Bosnian-based unit of Konzum.
The restructuring of Konzum BH, however, does not include any transfer of liabilities to Mercator, the Slovenian company said.
"Mercator will acquire the equipment and inventory in Konzum's stores, based on arm's length principle, i.e. at market price, and thus mostly resolve its challenges regarding the existing receivables from its peer," it said.
The Slovenian company noted it has been working intensively on its re-entry into the Bosnian market, as it is faced with settling its relations with suppliers and employees, among other things.
"Mercator's entry into the new market also means a business opportunity for Slovenian suppliers whose brands are perceived as being of high quality in the Federation and the Serb Republic", Mercator said, referring to Bosnia's two entities. The company added that it does not expect any problems in cooperation with local and regional suppliers.
In 2014, following the takeover of Mercator by Agrokor, Konzum was put in charge of retail operations in Croatia and in Bosnia. Mercator's fast-moving consumer goods stores in Croatia and Bosnia were leased out at arm's length principle to Konzum.