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Croatia's Fortenova plans 1.2 bln euro bond to refinance debt

Author Iskra Pavlova
Croatia's Fortenova plans 1.2 bln euro bond to refinance debt Photo: All Rights Reserved

ZAGREB (Croatia), July 22 (SeeNews) - Croatia's Fortenova Group, the successor to failed Agrokor concern, said it plans to issue up to 1.2 billion euro ($1.35 billion) bond to finance maturing debt.

The group plans to sell four-year bonds at 7.3% interest plus EURIBOR with 1% floor, it said in a statement on Saturday.

“I am particularly proud that we have negotiated up to 1.2 billion financing in the open market, which will be available from a respectable financial institution that has no prior links with our company," Fortenova CEO Fabris Perusko said in the statement.

"The fact that we did not have to go to our owners or present-day creditors for Super-Priority Facility Agreement (SPFA) refinancing proves that our business is viable and has good prospects, recognized by HPS Investment Partners. Also, participation of VTB Bank, one of our owners and present-day creditors, in this arrangement that is subject to their credit approval, clearly shows that those who know our business well also believe in our future," Perusko added.

The bond issuance is still subject to approval by the group's shareholders and depositary receipts (DR) holders. The electronic vote of the DR holders on the issue will close on July 25, while a general assembly meeting will be held the following day, Fortenova said.

It added that the proposal needs the approval of 2/3 of the DR holders to pass.

Foretnova also said 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.

Back in June 2017, Croatia's troubled Agrokor food-to-retail concern 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 under the agreement, contributing 200 million euro, or 20.83% of the total initial amount provided back then. The second biggest lender was Russia's 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 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. Along with Sberbank, the new owners include holders of Agrokor bonds with a 24.9% stake, Croatian financial institutions with 15.3%, VTB with 7.5%, and suppliers with 4.7%.

($=0.891263 euro)