January 24 (SeeNews) - The Bosnian unit of retailer Konzum, a member of Croatia's ailing concern Agrokor, has received a capital injection of 67.6 million marka ($42.7 million/34.6 million euro) from Agrokor's subsidiaries in Bosnia, the prime minister of Bosnia's Federation said.
Konzum's capital was increased from 24.9 million marka to 92.5 million marka by its peers, the Bosnian units of ice cream and frozen food producer Ledo and mineral water company Sarajevski kiseljak, Federation prime minister, Fadil Novalic, said in a statement on Tuesday.
The capital increase has created conditions for Konzum's recovery and for an agreement with suppliers.
"We are intensely monitoring the developments with respect to the restructuring plan that Agrokor has prepared for Bosnia and Herzegovina. Four activities were key in this plan: the recapitalization of Konzum, transfer of a part of its business to Mercator, retaining jobs and reaching agreements with suppliers," Novalic said.
Slovenia's Mercator returned to Bosnia in September in a bid to fix Agrokor's performance in Bosnia. So far the retailer has taken over 78 stores of the planned 80, Novalic noted, adding that the remaining two will be re-branded in the next two months. Konzum has continued to run some 176 stores.
Since September, some 1,300 employees have moved from Konzum to Mercator.
According to Novalic, Agrokor currently owes Bosnian suppliers a total of 87 million marka.
"In such large restructuring processes, it is not possible to completely avoid risks and damages, especially since all events in Bosnia are under the strong influence of events in Croatia. It is quite clear that this is a process that will keep going, until operations are fully stabilised," Novalic added.
In 2014, following the takeover of Mercator by Agrokor, Konzum was put in charge of retail operations in Croatia and Bosnia. Mercator's fast-moving consumer goods stores in Croatia and Bosnia were leased out to Konzum at arm's length principle.
(1 euro=1.95583 marka)