March 30 (SeeNews) - The first deputy president of Russia's VTB Bank, Yuri Soloviev, has said the management of Croatia's heavily indebted concern Agrokor allegedly committed irregularities in book-keeping, according to Croatian media reports.
"Agrokor's debt has not been completely revealed in its financial statements", news portal Index quoted Soloviev as saying late on Wednesday.
"The owner and the management have been submitting irregular financial statements. This led to the company falling into debt", Soloviev added.
He announced that the Croatian government, VTB Bank and a group of other creditors should sign a standstill arrangement this week to postpone the payment of Agrokor's financial obligations in order to get the company back on track.
"The standstill should be relatively short at the beginning, a week or a month long and not a year. Changes in ownership structure are also possible (after debt restructuring)", Soloviev explained, according to index.hr.
He added that the company needs a change in management and that this could entail members of the government and creditors entering the board of directors.
"The company needs to strengthen management", Soloviev noted. "For the new management team we are seeking professionals with a global reputation and specialists in solving problems".
Agrokor has borrowed some 300 million euro ($322.1 million) from VTB Bank.
Croatia's government also announced on Wednesday it is in the final stages of drafting a bill to aid debt-laden companies important for the country's economy, which many have speculated is being prepared with the aim of addressing the financial difficulties of Agrokor.
Later in the day, Moody's announced it has, once again, downgraded the Croatian retailer and food manufacturer Agrokor corporate family rating (CFR), this time to Caa1 from B3, and its probability of default rating (PDR) to Caa1-PD from B3-PD.
Agrokor too issued a statement but said it is unwilling to make any comments at present and announced it will soon reveal a plan to fix the company's problems.
Agrokor's financial issues became apparent earlier this year when Moody's downgraded it's corporate family rating (CFR) to B3 from B2. The company then pulled out of a syndicated loan deal it had struck with several international lenders, which sent the price of its bonds on international markets into a downward spiral.
($=0.931352 euro)