February 27 (SeeNews) - Croatia's prime minister said over the weekend that the government is following closely the situation at local retailer and food manufacturer Agrokor.
On Friday, Moody's Investor Services said it has changed its outlook on Agrokor from stable to negative, after last month it downgraded its corporate family rating (CFR) on the company to B3 from B2. 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.
"We are monitoring the situation and expect the owner and management of Agrokor to cautiously answer to the challenges faced by the company, taking into account its financial stability and its suppliers," Andrej Plenkovic is quoted as saying in a government statement issued over the weekend.
"Our decision to change Agrokor's outlook to negative reflects the uncertainties weighing on its credit profile, which is constrained by a more limited access to credit markets and a need to stabilize operating performance and leverage at a time when the company's shareholder Adria is due to address the repayment of its PIK toggle loans," Vincent Gusdorf, a vice president - senior analyst at Moody's, said in a statement on Friday.
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.