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Croatia's Fortenova issues 1.16 bln euro bond to refinance debt

Author Iskra Pavlova
Croatia's Fortenova issues 1.16 bln euro bond to refinance debt Photo: All Rights Reserved

ZAGREB (Croatia), September 9 (SeeNews) - Croatia's Fortenova Group, the successor to failed Agrokor concern, said it has issued a 1.157 billion euro ($1.276 billion) four-year bond in order to refinance maturing debt.

Fortenova has thus successfully closed the process of refinancing its Super-Priority Facility Agreement (SPFA) signed in June 2017, the group said in a statement on Friday.

The new financing is led by US-based investment firm HPS Investment Partners in cooperation with one of Fortenova's owners and present-day creditors - Russia's VTB Bank, and has a 7.3% interest rate plus EURIBOR, with 1% floor.

It added that thanks to the new deal the refinancing cost has been reduced, in line with Fortenova's target to lower its leverage ratio.

"By closing the new financing arrangement Fortenova Group has fully refinanced the SPFA loan and provided for its mid-term stability and long-term viability, growth and development," Fortenova CEO Fabris Perusko said in the statement.

"We would like to thank all shareholders who have recognized and supported the process that is in the interest of all stakeholders. Fortenova Group is now entering a new stage of operations focusing on profitability increase, efficiency improvements and value creation for all stakeholders," he added.

In June 2017, Croatia's troubled food-to-retail concern Agrokor signed a roll-up financing arrangement of up to 1.06 billion euro with over 30 creditors. US-based hedge fund Knighthead Capital was the top lender, contributing 200 million euro, or 20.83% of the total initial amount provided back then. The second biggest lender was VTB Bank with 181.5 million euro, followed by the Croatian unit of UniCredit Group, Zagrebacka Banka, with 180 million euro.

The business operations of troubled Agrokor were transferred to the newly formed Fortenova Group in April 2019 under a settlement agreement with creditors endorsed by a Zagreb court in June 2018. Under the settlement agreement a new business entity held by the creditors was established, in which the largest individual shareholder became Russia's Sberbank with a 39.2% stake, followed by the holders of Agrokor bonds with a 24.9% stake, Croatian financial institutions with 15.3%, VTB with 7.5%, and suppliers with 4.7%.

Foretnova said earlier that the estimated January-June revenue of its key companies rose 2% on the year to 1.53 billion euro, while the estimated EBITDA in the six-month period was up 5% to more than 101 million euro.

($=0.906785  euro)