Croatian food group Agrokor’s efforts to avoid bankruptcy faced a further setback on Wednesday with the resignation of the manager appointed by the government to secure a debt restructuring deal.
The biggest employer in the Balkans owes roughly 5.5 billion euros ($6.8 billion) and has until July to reach a final deal with creditors.
Ante Ramljak, who was appointed in April to draw up a debt restructuring plan, announced his resignation on Wednesday after a meeting with Prime Minister Andrej Plenkovic the previous evening. The meeting followed recent revelations that Ramljak had hired his former employer, consultancy Texo Management, to advise on the restructuring process.
Local media had reproted that Texo was paid 240,000 kuna ($40,000) a week to advise Agrokor, which is high for Croatia.
The Prime Minister told reporters that Ramljak would continue to perform his duties until the government appoints a new crisis manager and that there will be no extension of the July 10 deadline to reach a settlement with creditors.
Ramljak and Plenkovic’s meeting, which ran late into the night on Tuesday, came after Ramljak told parliament’s economic committee last week that he was ready to face the consequences if lawmakers and the government decided he had behaved outside the powers entrusted to him under the emergency administration at Agrokor.
Marica Vidakovic, of confectioner Kras, one of Agrokor’s major suppliers and a member of its interim council of creditors, said a deal with creditors would now be delayed.
“The entire process of (debt) restructuring is in a very sensitive phase right now,” she told state HRT television.
The Zagreb stock exchange suspended trading in shares of Agrokor companies on Wednesday, including water bottler Jamnica and ice cream maker Ledo, after Ramljak’s resignation.
Agrokor, which has about 60,000 staff, was placed in state-run administration last April. It aims to secure a deal with 5,700 creditors including banks, bondholders and suppliers to restructure its debt as a combination of new sustainable debt and equity. ($1 = 0.8117 euros) ($1 = 6.0367 kuna)
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