February 13 (SeeNews) - Russia is closing its market for poultry producers Koka and Perutnina Ptuj-Pipo, beverage group Vindija, food producer Belje and meat processing firm PIK Vrbovec, all members of Croatia's privately-held concern Agrokor, according to Croatian media reports.
Earlier this month, the Croatian foreign ministry was asked by Russia to cancel all export licences for Croatian food products, except for the licences of Brac-based canned fish maker Sardina and food, beverage and drug producer Podravka, news portal Poslovni.hr reported over the weekend citing unofficial sources.
The request came shortly after the Russian ambassador to Croatia, Anvar Azimov, announced that Agrokor is not among the companies Russia does business with and Russian banks will no longer provide loans to the company.
According to the vice president of the Croatian Chamber of Commerce, Zelimir Kramaric, Russia probably is conducting a periodic review of its partners and wiping off all those who in the past 36 months have made no exports to the country, Poslovni.hr said.
Poslovni.hr also reported that before the European Union and the US introduced sanctions on Russia over the crisis in Ukraine, the Russian market held a great potential for Croatia, especially in the meat and dairy sectors.
Croatia's trade with Russia has drastically dropped since the imposition of sanctions. According to the Russian ambassador, Croatia now exports goods valued at 300 million euro ($319.3 million), half the sum exported prior to the sanctions.
In late January, Croatian media also reported that Agrokor is in danger of bankruptcy following news it had cancelled a syndicated loan maturing in 2019, which caused its bonds on foreign markets to enter a free fall. The news caused panic among investors, prompting a strong decline in bond prices, news portal index.hr reported at the time. The loan was part of a wider programme of funding which ensured a 2-to-3 year extension of the maturity of short-term debt of 500 million euro.
To make matters worse for Agrokor, Moody's Investor Services downgraded the corporate family rating (CFR) on the company to B3 from B2 and the probability of default rating (PDR) to B3-PD from B1-PD last month. At the same time, Moody's downgraded the senior unsecured rating assigned to the notes issued by Agrokor and due in 2019 and 2020 to B3 from B2. The outlook on all ratings is stable.
The news of the Russian ban, spells a new trouble for the company, according to Croatian media reports.
Based in Zagreb, Agrokor has operations in food and beverages, as well as in food retailing.
($=0.939711 euro)