Fortenova Group

In order to prevent the collapse of the Agrokor system due to illiquidity and over-indebtedness as well as the consequences on the economies of Croatia and other countries in Southeast Europe, on 10th April 2017 the Extraordinary Administration Procedure was activated pursuant to the Act on Extraordinary Administration Procedures in Companies of Systemic Importance for the Republic of Croatia.[7]

The Commercial Court of Zagreb sanctioned the creditors’ Settlement Plan on 6th July 2018,[8] and by the decision of the High Commercial Court passed on 18th October 2018 the creditors’ Settlement Plan has become final.[9]

The Extraordinary Administration Procedure has been accepted as an insolvency procedure in England and Wales by the High Court of England and Wales on 9th November 2017, for the territory of Switzerland in February 2018 and in the US at the Bankruptcy Court New York according to Chapter 15 in November 2018. By Regulation of the European Parliament and the Council, in July 2018 the Act on Extraordinary Administration Procedures was included in the list of national laws recognized as insolvency procedures on the entire territory of the European Union.[10]

Fortenova Group commenced operations on 1 April 2019, taking over assets of indebted conglomerate Agrokor.[2] At the time of establishment, it had a total of 159 subsidiary companies in which 52,000 people are employed.[3]

In September 2019, Fortenova Group issued 1.16 billion euros in four-year bonds to refinance a 2017 loan. The new financing is structured as a EUR 1.2bn four-year bond.[5] This transaction and the financial restructuring of Agrokor during the course of the Extraordinary Administration Procedure, resulting in a settlement between the creditors and its successful implementation, was assessed in the USA as the most significant international company transaction of its kind worldwide. The team in charge of the process headed by the Extraordinary Commissioner Fabris Peruško won the prestigious 2019 TMA Turnaround and Transaction Award in the category International Company Transaction of the Year.[11] According to the choice made by readers of Večernji list, the refinancing of the roll-up loan at Fortenova Group was the commercial event of the year 2019 in Croatia. Thus Fabris Peruško, Chief Executive Officer of Fortenova Group, received the award presented since four years for the second time in a row and on that occasion he pointed out that the nomination itself was a great honour for the company, while the acknowledgment has confirmed the importance that the refinancing had for the business operations of Fortenova Group as one of the region's most important companies as well as the indirect impact this had on the economies of all countries in which Fortenova Group operates.[12]

April 2019 – on 1st April 2019 Mercator was not transferred to Fortenova Group

September 2019 - Javna agencije za varvstvo konkurence / Public Competition Agency (of Slovenia) (AVK) passed a non-final ruling in September 2019, unprecedented in the history of that Agency, imposing a fine of EUR 53.9m due to failure to file the concentration of the company Costella, acquired by Ivica Todorić, i.e. Agrokor AG from Switzerland, back in 2016. Agrokor lodged an appeal against this decision.[13]

December 2019 – On 16th December AVK passes the decision to temporarily seize Mercator d.d. shares from Agrokor d.d., allegedly in order to secure funds for the collection of the fine. The interim measure of seizing the shares of Mercator d.d. was passed pursuant to the Misdemeanour Act, specifically the provisions of that Act that otherwise apply in case of traffic offences or similar offences discovered in flagranti, committed by foreign natural persons in the Republic of Slovenia. This in fact constituted an expropriation of private property of Agrokor d.d., whereby the Mercator shares were temporarily seized without any court decision and with no valid legal justification.[13]

June 2020 – With its judgment dated 1st June 2020 the court Okrajno sodišče of Ljubljana altered the decision of the Competition Agency of the Republic of Slovenia on the amount of the fine imposed on Agrokor for not having filed the acquisition of the company Costella with the Agency for assessment at a time when Ivica Todorić managed the company and was its owner. The monetary fine in the amount of EUR 53.9m was reduced by the Court to one million euros, with the explanation that the failure to file the concentration was not the result of the “intention to bypass the filing of the concentration in order to possibly cause harmful effects on market competition”, but was rather the “result of unconscientious negligence of the responsible person Ivica Todorić”. The Court has therefore assessed that a monetary fine of one million euros was the “appropriate and equitable sanction for the offence in question".[14]

July 2020 – The Supreme Court of the Republic of Slovenia passes a judgement pursuant whereto the Mercator shares temporarily seized in late 2019 by decision of the Public Competition Agency of the Republic of Slovenia, have to be returned to Agrokor without delay. The Supreme Court declared the seizure of shares to be unlawful, arguing that AVK had no legal foundation to issue the ruling on seizing the shares.[15]

The request for the protection of lawfulness was filed with the Supreme Court of the Republic of Slovenia by the State Attorney’s Office of the Republic of Slovenia, where it basically stated that the Slovenian AVK had acted unlawfully by seizing the Mercator shares from Agrokor. With its final and non-appealable judgement the Supreme Court confirmed that statement, changed AVK’s decision and stopped the procedure run by AVK against Agrokor, in which the Mercator shares had been seized. Thus the Supreme Court enabled Agrokor to freely dispose of the shares.

September 2020 – The European Commission cleared the concentration of Fortenova Group and Mercator, thus paving the way for the transfer of Mercator to Fortenova Group.[16]

• Official website