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Fortenova removes sanctioned equity holders from ownership structure

Jul 9, 2024, 6:17:16 PMArticle by Annie Tsoneva
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July 9 (SeeNews) - Croatia’s Fortenova Group said on Tuesday that it no longer has any sanctioned or Russian or Belarusian equity holders after its Dutch top holding company, Fortenova Group TopCo B.V., completed the transformation of its ownership structure.

Fortenova removes sanctioned equity holders from ownership structure
Source: Fortenova

“The transaction, entered into in November 2023, aims to prevent further financing and operational difficulties and to avoid significantly increased financing and compliance costs stemming from the presence of sanctioned equity holders in Fortenova Group,” Fortenova said in a press release.

The deal between Fortenova Group TopCo and Maltese-registerted Open Pass, the largest non-sanctioned Fortenova Group depositary receipt holder in Fortenova STAK foundation, involved the sale and transfer of 100% of TopCo’s equity in MidCo for a total consideration of up to 660 million euro ($714 million).

“On July 9, 2024, with all applicable approvals and conditions precedent satisfied or waived, the total purchase price was settled in full by eligible Fortenova Group equity holders who decided to transfer their stakes to the new ownership structure, and the shares in Fortenova Group MidCo B.V. have been transferred to Iter BidCo B.V.,” the group said.

The total purchase price of 500 million euro includes 86 million euro allocated to fully repay the so-called ‘border debt’ to the former Agrokor suppliers, ensuring their financial claims are now settled in full. Additionally, 33.5 million euro will remain with Fortenova Group TopCo to fund its contingent liability and its operational costs until its liquidation, which is expected in three to four years.

Of the 500 million euro received at closing, total sales proceeds of 380.5 million euro will be distributed to equity holders, whereas 154.9 million euro represents the transfer of equity to the new ownership structure, and 225.5 million euro will be distributed in cash to the equity holders that will not remain in the new ownership structure. Of this, the largest portion, an amount of 165 million euro, consisting of 159 million euro that goes to SBK Art and 6.0 million euro for Sberbank’s escrowed depositary receipts, will be held for Sberbank and its affiliate in a special escrow account that they will be given access to once the sanctions regulations of the European Union, the US, and the UK permit it.

Upon completion and following a subscription process in which all non-sanctioned and non-Russian or Belarusian persons were entitled to participate in Iter BidCo B.V. on the same terms as Open Pass, Open Pass has become the majority equity holder with a 93.78% stake in Iter BidCo B.V. Over 80 minority equity holders have decided to participate in the new ownership structure and together hold a 6.22% stake, Fortenova added.

Open Pass is majority owned by Croatian businessman Pavao Vujnovac.

As Open Pass has now exceeded the relevant 85% threshold, it should now make a mandatory offer for all depository receipts (DRs) not held by it at a price equal to the subscription price in Iter BidCo B.V.

“With the removal of sanctioned equity holders, Fortenova Group will now direct its efforts toward refinancing its 1.2 billion euro debt and improving operational efficiencies. The Group is poised to enhance its daily operations, unburdened by the complexities associated with the previous sanctioned equity holders,” Fabris Perusko, Fortenova Group’s CEO and Member of the Board of Directors said.

Fortenova Group is a major employer in Southeast Europe with over 45,000 employees and includes companies such as Konzum, Mercator, Zvijezda, Dijamant, Jamnica, and PIK Vrbovec.

($ = 0.925 euro)

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