ZAGREB, February 25, 2019 - Russian Ambassador to Croatia Anvar Azimov said on Monday the sale of Russian banks' stakes in Croatia's Agrokor was a corporate issue and that he was certain that in the period ahead Sberbank's main accent would be on further stabilising and improving the situation in the food and retail conglomerate.

Responding to questions from the press about the possible sale of Russian state banks' interest in Agrokor, Azimov underlined the positive role of Sberbank and VTB. After the implementation of a settlement for Agrokor, Sberbank will hold 39.2% and VTB 7.5%.

Azimov said their main goal had been to salvage Agrokor, stabilise and restructure it.

All those objectives have been met. The situation in the company is much better now, it's profitable, and Sberbank's job is to make the company even more profitable in the interest of Croatia and its stability, he added.

As for the possible sale of Agrokor shares, Azimov said it was a corporate issue between Sberbank and Agrokor. We in the embassy don't interfere in these things, but I'm absolutely sure that in the months ahead Sberbank's main accent will be on further stabilising and improving the situation in Agrokor, he added.

Asked if Croatia's future LNG terminal would affect its energy cooperation with Russia, Azimov said it would not as Croatia would always need Russian gas.

If Croatia is interested in building an LNG terminal, we can welcome that. Even if it builds the terminal, Croatia will always need Russian gas. Last year we exported more than 200 billion cubic metres of gas to European Union countries and the demand for gas is rising, while at the same time production in EU countries and Croatia is falling, Azimov said.

He said all they wanted was fair competition. I know that the LNG terminal can't compete with Russian gas, which is cheaper, more reliable and better, he added.

More news about Agrokor can be found in the Business section.

ZAGREB, February 3, 2019 - Slovenia's government does not plan to get back Mercator, however, it wants to take this retail company from the embrace of the Zagreb-headquartered Agrokor concern, and Slovenian Economy Minister Zdravko Počivalšek told the local media on Saturday that the Croatian conglomerate proved to be a poor manager.

"We want to make sure that Mercator will have a more stable business future and create conditions for finding a new owner who will overhaul the company. However, the Slovenian government is not going to buy it back, contrary to some speculations which have recently appeared," the minister told the Maribor-based Većer newspaper.

Počivalšek said that in 2014 when it took over Mercator, Agrokor was actually over-indebted and later it became insolvent, however, the Slovenian minister does not believe that the current Agrokor, which has been restructured, can be a good manager of Mercator.

He also believes that now it is the right time to seek a new owner for Mercator which employs about 10,000 in Slovenia and which annually purchases a half billion products from local suppliers.

The minister refuses to speculate whether some Slovenian companies may be interested in purchasing Mercator from Agrokor now when Russia's Sberbank hinted at the possibility that it would sell its stake in the Croatian concern.

More news on Agrokor can be found in the Business section.

Ivica Todorić, the former Agrokor boss, thinks that the largest Croatian company, which once lay in his very hands, was destroyed by politics, and not a bad economic policy.

As VLM/Poslovni Dnevnik writes on the 1st of February, 2019, Ivica Todorić, now living back in Croatia following his return from the British capital, in which he spent one year passing through London courts and attempting to fight his cause, decided to receive a television crew from Slovenia in his home and comment on the purchase of Mercator by the then enfeebled Agrokor, as well as his view on what exactly went wrong.

At first, he made sure to point out that nobody loves Mercator as he does, and he honestly believed that Mercator's takeover was going to equal success for the Slovenian company, considering it a move which gave it the foundation it needed for its future development.

Asked if Agrokor would have survived if he hadn't purchased Mercator, he replied that everyone is constantly talking about some sort of debt, but Agrokor never had big any debts.

''I mean, they were large [debts] but they weren't in amounts that were not able to be handled," noted the ex Agrokor boss.

As stated, Ivica Todorić thinks that the largest Croatian company has been destroyed politics, not a bad economic policy.

Questions about life after his flight to London and his eventual return to Croatia were met with open answers. ''It isn't easy for me, I'm dependent on the help of friends,'' he added that they helped them collect the bail money needed to leave Remetinec prison. He speaks of having living costs that aren't particularly easy to cope with, a situation one could never have expected Ivica Todorić, who once graced the glossy pages of Forbes, to ever find himself in.

Although he is currently living in a huge property of 55,000 square metres, he made sure to justify it by emphasising the fact that that particular estate is divided up into what belongs to four families.

''This is my only piece of property. My part is worth about six million euros. I'm not trying to say that this isn't much, but I was once the richest man in an area consisting of 200 million people,''

When asked about the background of court proceedings, he replied that Prime Minister Andrej Plenković and the Croatian Government were behind it. He also announced his planned entry into politics.

''We'll set up a new party. I believe we'll do well and that we'll win a parliamentary majority,'' he stated.

In just five days, Ivica Todorić collected a million euros for his release from Remetinec prison.

Make sure to stay up to date by following our dedicated politics and lifestyle pages.

Click here for the original article by VLM on Poslovni Dnevnik

With the firm support of the Croatian Trade Union, since the 1st of January this year, Konzum increased the salaries of its employees by a net amount of 350 kuna.

As Poslovni Dnevnik writes on the 1st of February, 2019, this wage increase from Konzum refers to employees who are being paid on the basis of coefficiency and will be paid permanently, in addition to their usual monthly salaries, in an amount that is entirely non-taxable, starting with the first such salary from January this year.

"I'm glad to start this year with some good news for our employees. Their satisfaction is high on the list of our priorities, and with this move we want to show them once again how much we appreciate their daily work and efforts to contribute to stable business and good business results,'' stated Slavko Ledić of Konzum's management board.

This income increase is a continuation of Konzum's policy of improving and increasing its workers' rights and benefits. Due to the formerly enfeebled company's successful business results, from the beginning of 2018 to today, salaries have increased by a total of six percent. With the increase of the paid Christmas bonus in the amount of 1,500 kuna per employee, throughout 2018 there were also numerous other benefits which were secured, such as Easter bonuses, a bonus for children, and paid private health insurance.

Despite Agrokor's ups and downs that have continued to rock the Croatian economy over the past couple of years, Konzum has employed more than 1,300 new workers over the past year, mostly in the retail and logistics sectors. All employees are readily offered flexible working hours, a convenience that is of particular interest to parents, students, and henceforth to retirees to whom half-time employment is open, in accordance with the new statutory provisions.

Make sure to stay up to date by following our dedicated business page.

ZAGREB, January 29, 2019 - With the process of registering the new names of the future Agrokor Group mirror companies having been completed, the procedure to appoint the management boards/ managing directors of the new companies started before the Commercial Court of Zagreb on Tuesday, Agrokor's emergency administration said in a press release.

The management boards and managing directors of the mirror companies will mostly remain the same as in the existing Group companies. Changes will only be made at several smaller companies where individual management board members / directors have announced that they will leave for other reasons of their own accord, the press release said.

For example, Konzum Plus, Ledo Plus, Jamnica Plus, Belje Plus and other companies will continue to be run by the same management boards as the existing companies, as will be the case with the other Group companies that will follow the same logic.

The appointment of mirror companies' managements is one of the steps in the process of preparing the implementation of the creditors' Settlement Plan and is an important precondition for the mirror companies to become fully operational on the implementation commencement date.

Unlike the mirror companies, the parent company Agrokor d.d. will get a completely new name by the end of January and will not use the name Agrokor any more.

More news on Agrokor can be found in the Business section.

ZAGREB, January 25, 2019 - Prime Minister Andrej Plenković said on Friday he had no information that Russia's Sberbank planned to sell its stake in Croatia's Agrokor conglomerate in the first half of this year.

Sberbank vice president Alexander Vedyakhin said yesterday, according to Russian news agencies, that the bank planned to sell its stake in Agrokor in the first half of 2019 and that negotiations with interested buyers were under way.

Sberbank is Agrokor's biggest creditor and, under last year's settlement, its biggest shareholder with a 39.2% interest.

"There's no long-term logic in someone whose business is banking co-owning a company whose business is agriculture, food and retail," Plenković said in Davos. "But for now, we have no information about a sale."

To the government it is important that the settlement be carried through, that Agrokor functions and that people are employed, he added.

On the fringes of the World Economic Forum (WEF) in Davos, Plenković met with Bosnian Prime Minister Denis Zvizdić, which was their first meeting after last October's general elections in Bosnia and Herzegovina.

Plenković said they talked about government formation in BiH, a reform of its election law, as part of which he said Croat equality was key, and Croatia's support for reforms aimed at bringing BiH closer to the European Union.

Commenting on the Bosniak Party of Democratic Action motion for assessing the constitutionality of the Bosnian Serb entity's name, Republika Srpska, and Bosnian Serb official Milorad Dodik's response to that and threats that the entity would separate from BiH, Plenković said Croatia wanted peace and stability in its neighbourhood. "We don't look favourably on initiatives that can bring that in question."

Dodik has made similar statements before, "but it's important that everyone does the part they have in line with their authority," he said, adding that Croatia respects BiH's territorial integrity.

Speaking of today's meeting with Irish Prime Minister Leo Varadkar, Plenković said Croatia was following the turbulence in British politics related to Brexit. "We see that Prime Minister May is fighting to reach a kind of consensus in parliament for the adoption of the withdrawal deal, but the prospects aren't rosy."

A no-deal Brexit would be the worst scenario and everything should be done to avoid it, Plenković said. "Ireland has certain red lines which it has highlighted, i.e. the backstop option to avoid a hard border between Ireland and Northern Ireland. That's vital to them and everybody in the EU understands it," he said, reiterating that the ball is in London's court.

More news on Agrokor can be found in the Business section.

As Poslovni Dnevnik writes on the 11th of January, 2019, the most successful company in Agrokor's latest reporting period was Konzum, which has continued to deliver handsome revenue and operating profit despite having faced a very long period of uncertainty and adversity.

The 21st monthly business report was published by sixteen companies from the following business segments within Agrokor - retail and wholesale, food and agriculture, covering the period from the 11th of December, 2018, to the 10th of January, 2019.

Operations in the first eleven months of 2018 saw companies realise as much as 21,508 million kuna in revenue, while operating profit stood at 1,716 million kuna.

The most successful company in the reporting period was Konzum, Agrokor's proverbial shining star, whose EBITDA was higher than the plan by as much as 157.9 million kuna, or more than 60 percent, while revenues exceeded the plan by 111 million kuna or 1.4 percent. Consequently, Konzum is the main carrier of operating profit for Agrokor's retail and wholesale business segment.

The largest contribution to the overall operating result of the formerly ailing Agrokor Group was provided by food companies, whose EBITDA was 67.6 million kuna higher than the plan, and almost all companies realised higher profits than the plans. Companies in the segment of agriculture experienced a fall in revenues and operating profit in relation to the plan, but they compensated for the optimisation of costs and the strengthening of other activities, and in eleven months of 2018, they realised slightly more than 2 billion kuna in revenue, and 172.3 million kuna in operating profit.

As part of the extensive preparations for Agrokor's implementation process, on the last day of 2018, all of the Agrokor Group's mirror companies, which have so far been registered as companies under generic names, have been officially granted new names by the Commercial Court in Zagreb. The new names of companies that will begin operating after the completion of Agrokor's creditor's settlement, consist of their old names and the ''plus'' add-on. For example, after the completion of the implementation process, Konzum will operate under the name Konzum plus, Jamnica under the name Jamnica plus, Zvijezda as Zvijezda plus, Ledo under the name Ledo plus, and so forth.

The old names have been retained within the new names of Agrokor's companies in order to preserve the strong value of these branded companies, which will continue to perform on the market under their current brands even after the implementation of the settlement. At the transition stage, the headquarters of all new companies will be in Zagreb, and after the implementation of the settlement, they will be returned to the cities across various parts of Croatia in which they're currently registered and operating.

Unlike mirror companies like Konzum, the Agrokor d.d. umbrella company will get a brand new name by the end of January, and will no longer use the name "Agrokor", resigning the name to the history books alongside the company's former owner, Ivica Todorić.

Make sure to stay up to date with everything you need to know about doing business in Croatia by following our dedicated business page.

ZAGREB, January 2, 2019 - The Croatian Bar Association (HOK) has suspended disciplinary action against lawyers Boris Šavorić and Toni Smrček, who are suspected of legal malpractice and unprofessional representation during their involvement in the drafting of the law on the Agrokor food and retail group and the restructuring of this indebted conglomerate.

Šavorić and Smrček were perceived in the public as lawyers implicated in the so-called Hotmail affair, which resulted in the resignation of Deputy Prime Minister and Economy Minister Martina Dalić last year. Šavorić was also suspected of violating attorney-client privilege.

Email correspondence leaked by a news website showed that the suspects were involved in the drafting of the Agrokor law while at the same time their lawfirm represented the Russian bank VTB, one of Agrokor's creditors.

The HOK stated that the disciplinary action, initiated last May, had found no evidence to corroborate the allegations of wrongdoing by the two lawyers.

More news on Agrokor can be found in our Business section.

With the implementation at the Commercial Court in Zagreb, the information that all of Agrokor's future mirror companies, which have thus far been registered as companies under generic names, will officially get new names.

As Poslovni Dnevnik writes on the 21st of December, 2018, the new names of companies that will start operating with the completion of Agrokor's creditor settlement are made up of their old names plus an add-on.

For example, Konzum will become Konzum plus following the implementation, Jamnica will become Jamnica plus, Zvijezda will operate as Zvijezda plus, Ledo will be Ledo plus, and so forth. At the transition stage, the headquarters of all of these new companies will be in Zagreb, and upon the completion of the settlement, they will be returned back to the various cities across Croatia in which they currently operate.

Unlike mirror companies, the Agrokor d.d. umbrella company will get a totally new brand name by the end of January and will no longer use the name "Agrokor" at all.

All of these changes are part of the process of implementing Agrokor's creditor settlement, which should be completed by the end of the first quarter of 2019. Meanwhile, Agrokor's extraordinary administration under the leadership of Fabris Peruško and Irene Weber is successfully completing the financial implementation and business restructuring of the company, the results of which are good business results and reports from all major operating companies.

In ten months in 2018, Agrokor's companies had a total revenue of about 20 billion kuna, while operating profit amounted to 1.7 billion kuna. The largest contribution to these positive operating results was given by companies in the food segment, whose operating profit was nearly 70 million kuna higher than the plan, while retail and wholesale companies realised 28.7 million kuna higher operating profit than planned. In the first ten months of this year, Konzum exceeded its projections by as much as 50 percent and realised nearly 430 million kuna in operating profit alone.

On this occasion, Agrokor's extraordinary commissioner Fabris Peruško said, "While 2017 was a year of the painstaking rescue of the collapsed system, 2018 was a positive breakthrough in all respects, from negotiations, the settlement, and validation through international recognition of the [Agrokor's] extraordinary management from the United States and Switzerland, to the excellent performance of the system. 2019 will be a year of even better prospects for all of our companies, employees, and [Agrokor's] new owners.''

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ZAGREB, December 31, 2018 - The companies in the Zagreb-based Agrokor Group will add the word plus to their names as of the start of 2019, and for instance, the retail chain Konzum will become Konzum Plus, or the mineral water and soft drink producer Jamnica will be Jamnica Plus and so on.

The changes are in line with the settlement agreement and its implementation, according to a press release issued by the Agrokor emergency administration on Monday. The implementation of the settlement is to wrap up until the end of the first quarter of 2019.

The press release read that in the first ten months of 2018, the companies within Agrokor generated about 20 billion kuna in revenues, with EBITDA for the period amounting to 1.7 billion kuna.

"The greatest contribution to the operating result comes from the Food sector, with EBITDA exceeding the budget by almost 70 million kuna, as well as Retail and Wholesale, with EBITDA outperforming budgeted values by 28.7 million kuna or 7.2 per cent."

"The driver of operating profits in Retail is Konzum, having exceeded plans both in revenues and EBITDA. Konzum has thus in the period I-X/18 outperformed planned sales revenues by 1.2%, while sales revenues in retail operations exceeded the budget by 4.4% on annual level. Konzum was able to exceed the budgeted EBITDA by as much as 143.7 million kuna."

Emergency Administrator Fabris Peruško has said that while 2017 was marked by painstaking efforts to salvage the group, 2018 has been a positive turning point.

More news on Agrokor can be found in our Business section.