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This section contains all questions collected so far. Queries shall continue to be collected, grouped under relevant themes and answered on weekly basis.

Creditor groups

  • Has the Extraordinary Administration defined the creditor groups in line with the Bankruptcy Act or the Law on the Extraordinary Administration Proceeding?

The Extraordinary Administration has defined the creditor groups in compliance with the provisions of the Law on the Extraordinary Administration Proceeding.

  •  What were the key reasons for being assigned to groups as stated?

The Extraordinary Commissioner’s proposal for the Creditors’ Council to have 5 members is based on the following reasons:

(a)        The Interim Creditors’ Council founded by Ruling of the Court dated 13th April, 2017 which is still active until the valid constitution of the (permanent) Creditors’ Council also has a headcount of five. In the work of the Interim Creditors’ Council over the period from mid April 2017 until end January 2018 this number has proved to be optimal in terms of operationality, quality and efficiency (on the one hand) and the proportional representation of all creditors assigned to the groups to which they were assigned then (on the other).

(b)        The proposed number of Creditors’ Council members corresponds to the number of specific groups to which the creditors should be assigned.

(c)        The proposed number of Creditors’ Council members is optimal in terms of the need to secure the regular attendance of all its members at all meetings, which can thus be held frequently enough and at acceptable cost and appropriate working time spent, without jeopardizing the work quality.

  • Why are there 5 groups again?

The number of five creditor groups, or five Creditors’ Council Members has proved, through the work of the ICC, to be optimal in terms of operationality, quality and efficiency (on the one hand) and the proportional representation of all creditors assigned to the groups (on the other). Furthermore, the number is also optimal in terms of the need to secure the regular attendance of all its members at all meetings, which can thus be held frequently enough and at acceptable cost and appropriate working time spent, without jeopardizing the work quality.

  • Although it was stated that the groups were similar to those in the ICC, there are still substantial differences. What are these differences?

There are two substantial differences to the groups.

The first one is related to the fact that the group „Unsecured creditors“ as known to date, has been divided into two groups – Group C and Group D, the reason being that unsecured creditors with pre-petition claims  are now being differentiated by the criterion of participation in the Super-Priority Term Facilities Agreement (SPFA). In case they have participated in the Super-Priority Term Facilities Agreement (SPFA), they belong to Group C, if not, they are assigned to Group D.

The second difference is that the Groups „Small suppliers“ and „Large suppliers“ have been assigned to one group – Group E, the reason being that creditors that used to belong to the group „Small suppliers“ have to a significant extent had their claims paid in full.

  • Why is Group B empty?

Group B is empty as currently the bondholders’ claims are contested (the Extraordinary Commissioner has verified them, but they have been contested by other creditors). However, the fact that a claim has been contested does not mean that it does not exist. The status of determined and contested claims is not final, as it is subject to possible civil proceedings which may be instituted to establish the merits and their outcome. Only by court decision in the civil proceedings will it be established whether these claims do exist or not. Furthermore, some contestations are being withdrawn by the contesting parties even over the course of this period, prior to instituting civil proceedings. For this reason and having in mind the specific legal position and economic interests of the bondholding creditors this specific group has been formed (Group B).

  • Why are all the suppliers in one group only? Why is this last group, Group E, so large, larger than any of the other groups?

The existing groups „Small suppliers“ and „Large suppliers“ have been assigned to one group – Group E, the reason being the fact that the claims owed to creditors from the group „Small suppliers“ have been paid in full.

Creditors are being assigned to groups according to their legal position and economic interests, while the number of creditors and the amounts of their claims are not relevant criteria for the assigning.

  • Why has the participation in theSuper-Priority Term Facilities Agreement (SPFA) been determined as a criterion for the establishment of a separate group, given that this criterion did not exist prior to April 10?

Creditors who are at the same time lenders under the Super-Priority Term Facilities Agreement (SPFA) participate in the groups based on the pre-petition claims. Given that the position of the Super-Priority Term Facilities Agreement (SPFA) is based on the specific features of the Extraordinary Administration Act and that liabilities arising from this Agreement have priority / seniority in recovery pursuant to the Extraordinary Administration Act, creditors with pre-petition claims who are also lenders in the Super-Priority Term Facilities Agreement (SPFA) have a different legal position than other creditors.

  • What is the logic behind creditors being differentiated based on (having) 5 or more guarantors? Why is it not 2 or more? Or 7 or more?

The number of 5 guarantees has been established as a criterion because claims secured by five or more guarantees are considered to be secured by companies which account for a material share in the Agrokor Group operations. The number of five has been selected given that, based on the filed claims and their guarantees, this number of guarantees is a significant criterion of differentiation for the creditors’ claims.

  • When and how will it finally be known who can vote to elect a representative for a specific group?

Creditors who may vote to elect a representative are those creditors whose claims have been determined in the Ruling passed by the Commercial Court on determined and contested claims. A list of these creditors, together with their assignment to specific groups, can be found in the table published by the Court together with the Ruling on assigning creditors to groups. If by expiry of the deadline for the election of the representative in the Council the contestations of some claims should be removed, those creditors will also be allowed to vote and elect the representative of their respective group.

  •  What will the procedure of electing the representative for each of the Groups look like?

By invitation in the Official Gazette the Extraordinary Commissioner has invited the creditors to inform him and the Court of the Creditors’ Council members within 30 days. Each creditor group shall elect one member to the Council by regular majority of votes within one group. The creditors have to submit the power of attorney for the elected member of the Council to the Extraordinary Commissioner. Should any of the Creditor Groups not appoint their member within 90 days as of the publication of the Extraordinary Commissioner’s invitation, the member for such group shall be appointed by the Court within an additional deadline of 8 days. The Creditors’ Council shall only be considered to be constituted once the Creditors’ Council members have been appointed for all creditor groups.

  •  What will happen with the creditors whose claims have been contested?

Creditors whose claims have been contested, unless they have an enforceable deed (in which case the contesting party shall be referred to civil proceedings), were referred by the Court to institute civil proceedings to establish (the merits of) their claims. This means that such creditors need to bring civil proceedings within 8 days as of the legal validity of the Ruling on determined and contested claims. Should they fail to institute civil proceedings within the said period, their claims shall be considered contested, i.e. non-existent and shall consequently not participate in the settlement agreement.

  • In case the Permanent Creditors’ Council should not be formed, is it possible, from the legal point of view, for the Interim Council (ICC) to make the decision on the settlement agreement?

Yes, the ICC may participate in drawing up and preparing the settlement agreement together with the Commissioner and it can give the Commissioner its consent to the final draft of the settlement agreement. This is provided by the Extraordinary Administration Act, which stipulates that the interim creditors’ council performs the duties of the (permanent) creditors’ council as long as the latter is not validly constituted.

  • Who gets to vote on the settlement agreement: all creditors whose claims have been determined by the Extraordinary Commissioner (and those whose civil proceedings have been settled in the meantime) or just those to whom the Commissioner has determined (HRK 41bn) less the HRK 10bn (HRK 31 bn)?

The settlement agreement will be voted upon by creditors with claims that have been determined by court ruling (for the time being it is the amount of HRK 31bn) and those which will be determined subsequently, whether due to civil proceedings not being brought or in the civil proceeding (because they had been contested by the Extraordinary Commissioner or by a creditor), by the day the settlement agreement voting takes place; exceptionally, the settlement agreement can be voted upon by creditors whose claims have been contested if at the voting hearing this should be agreed between the Commissioner and all other creditors with voting rights present at the hearing or if the Commercial Court so decides.

  • What will the further procedure of forming the Creditors’ Council look like after the Groups proposal?

The Extraordinary Commissioner has published an invitation to creditors in the Official Gazette to inform the Extraordinary Commissioner and the Court of the Creditors’ Council members within 30 days. Should any of the Creditor Groups not appoint their member within 90 days as of the publication of the Extraordinary Commissioner’s invitation, such Creditors’ Council member shall be appointed by the Court upon proposal of the Extraordinary Commissioner within 8 days of the expiry of the previously stated 90 days deadline. The Creditors’ Council shall only be considered to be constituted once all the Creditors’ Council members have been appointed.


Creditor claims and returns

  •  How much will creditors receive in the settlement?

The recovery will depend upon the company the creditor is claiming against and any security or other rights the creditor may have.  Details of the value attributable to each creditor are not yet available.

  • How is the recovery of each creditor calculated?

It is calculated by reference to the value of the business or assets of the company which owes the creditor together with the liabilities and associated rights in relation to that entity.  Across the group this is a complex exercise (so-called “entity priority model”) and forms a major priority for the Extraordinary Administration team.

  • On what ground will the assets be distributed to stakeholders? Is there a rankings list of claims?

The recovery will relate to the value of the assets and confirmed liabilities and associated rights of each individual company.  The ranking or waterfall is included in the restructuring proposal document.

  • Will all the creditors be paid from “the same pool”, or will their claims be repaid by individual companies (the ones they have claims against)?

The calculation of each creditor’s recovery will relate to the individual company against which they have a claim but will form a part of one global settlement plan.

  • Will every creditor receive the same recovery? If not, why not?

Creditors of different companies will receive different amounts depending on the value of the company they supply/lent to (and of course the recognized amount of their claims) – which represents the fairest and most equitable value allocation mechanism.

  • When and how will creditors be paid in the settlement?

All creditors will replace their pre-petition claims with new recovery instruments in the new structure and receive value in the form of equity and, possibly, debt instruments on finalization of the settlement. Creditors will receive a share of the value of the group, taking into consideration the circumstances of the individual (borrowing) companies.

  • Why should creditors support the plan?

We recommend that Creditors study the disclosure document and the draft settlement plan carefully when it is made available and form their own independent opinion. In the opinion of the Extraordinary Administrator and his team the proposed plan will provide the best outcome for creditors and avoids the very significant disadvantages of a series of bankruptcies.

  • What is a debt for equity swap?

A debt for equity swap is a means by which a company with too much debt, like Agrokor, can convert that debt into shares to achieve a sustainable, solvent, capital structure – it is a way of transferring the value of the group from the existing shareholders to the creditors whose claims cannot be fully satisfied within a reasonable time frame.

  • Can a creditor get a cash payment if they do not want debt or equity?

It is not expected that there will be a cash payment option on completion of the Settlement Plan.

  • What is the position on challenged claims?

Once reviewed by the court, challenged claims will be referred to litigation. Reservations under the settlement will be made for the challenged claims for which litigation will be pending.

  • If a creditor didn’t file a claim, can they still expect to receive a recovery?


  • I have security over an asset, can this security be enforced after the settlement?

Physical assets with existing security will be transferred to the relevant newly formed company with the security in place. If the security is worth less than the claim only that portion of the claim which is covered by the security will be transferred and the excess amount will rank as an unsecured creditor with all others.

  • Are foreign creditors treated differently from local creditors?

The treatment of creditors (and claims) is independent of whether they are domestic or international.

  • What happens to any amount already paid to creditors during the EA process?

It will be treated in accordance with the Law. The amount paid to a creditor under the rules of the Extraordinary Administration law will be considered as a payment under the settlement (i.e. settlement of that creditor) and taken into account in determining the ultimate distribution of determined recovery available to that creditor.

  • How are the amounts paid treated for the purpose of the settlement – is recovery calculated based on the balance of the remaining debt, or the original amount of debt?

Original amount as at 10 April 2017, taking into account any of this amount which was settled during the Extraordinary Administration.

  •  What will be the treatment of claims with physical or share collateral?

Claims with physical or share (in relation to solvent entities only) collateral will be novated to the new structure (up to the value of the collateral) and any shortfall will be treated as an unsecured creditor of the relevant company.

  • What will happen to the refinanced claims / new money put in by creditors in June?

The SPFA (including the supplier tranche) will be extended by agreement or refinanced in the settlement through the “Exit Facility” and effectively extended beyond its original maturity date, but will retain its current priority status in the new group.


Equity holders

  • Why do some equity holders receive nothing, and some remain unaffected?

The position of equity holders depends wholly on the financial position of the company in which the equity is held.  Where the company is insolvent, the value of all equity positions will be nil.  Where the company is solvent the equity continues to have value, and the equity holders will remain unaffected. All of the listed companies (Tisak, Zvijezda, Ledo, Jamnica, Belje, Vupik, PIK Vinkovci and Žitnjak), as guarantors for Agrokor d.d., are insolvent because the value of the businesses are substantially less than the liabilities of each of the companies – the shares in these companies therefore have a nil value.

  • What happens to any shares I hold in listed Agrokor entities?

If the entity in which you hold the equity is insolvent, then these shares have a nil value. If the entity is solvent the settlement will not affect your position as shareholder.

  • Can equity holders vote on the plan?

Only creditors are entitled to vote on the settlement plan under Croatian law.


Plan approval

  • Who votes on the plan and when?

Creditors with pre-petition claims vote on the plan once it has been formally proposed – the EA act prescribes that the process expires on 10 April 2018 (unless extended by the court) and it is currently expected that a proposal will have formally been made by then.

  • When will the plan become effective?

The plan becomes effective once the creditors have voted on it and the Court has confirmed it. Implementation of the settlement may be subject to the final court confirmation.

  • What proportion of creditors need to vote in favour of the plan to make it succeed?

A majority by number of creditors and amount of claims in each of the creditor classes or alternatively 2/3 of all claims by amount (in accordance with the EA act)

  • Will the government approve the plan?

The government is a creditor and entitled to vote alongside all other creditors in the plan.

  • What actions do I need to take to vote on the plan?

At the appropriate time the voting mechanics will be made public so that all creditors are afforded the opportunity to participate.

  • When will all these steps take place?

It is anticipated that this will occur in the first quarter of 2018 and a further announcement in relation to the precise details will follow.

  • What happens during appeal periods and litigation regarding the constitutionality of the EA law?

Appeals during the EA process may delay the progress subject to the nature and subject matter of the appeals. Litigation (remedies) regarding the constitutionality of the EA law will not affect the progress of the settlement process.


Restructuring Proposal

  • Has the government been involved in the design of the restructuring proposal?

The government, along with many other stakeholders, has been kept informed during the preparation of the restructuring proposal.

  • Has the Court/judge approved or been involved in the design of the restructuring proposal?

The Court/judge, along with many other stakeholders, has been consulted during the preparation of the restructuring proposal and will continue to be updated.

  • Which creditors have been involved in the design of the restructuring proposal?

The Extraordinary Administrator’s team have had discussions with all of the members of the ICC (the body which represents all creditors) during the process of preparing the proposed plan.



  •  What role have the ICC had in formulating the restructuring proposal?

The restructuring proposal publicized on 20 December 2017 incorporates views of the ICC following a meeting of the ICC on that date.

  • Has the ICC/PCC approved the restructuring proposal?

See above.

  • When is the PCC going to be formed?

The PCC can only be formed once the creditors elect the representative of their respective class following the Court’s decision on recognized and challenged claims.

  • Who will the members of the PCC be?

The members of the PCC need to be elected by the creditors once the classes have been finalized (expected to take place within 90 days from the public invitation to the creditors, following the Court’s decision on recognized and challenged claims).


New capital structure

  • How much debt will the new structure hold?

The total amount of debt in the new structure will be determined through a debt capacity analysis conducted by financial advisors to ensure that the restructured group is viable and its capital structure is sustainable post settlement. Details are not yet available.

  • Who will the equity or debt holders be?

Debt and equity holders at the level of the ultimate/top holding company will be the existing pre-petition creditors of Agrokor and its insolvent Croatian subsidiaries as new investors. At the level of the New HoldCo, debt will be held by (1) the current SPFA (if extended by agreement) or other (if refinanced) creditors through the Exit Facility and (2) the pre-petition creditors through any recovery debt.

  • Will this settlement stop the same situation occurring again?

The new structure will result in a significantly lower level of debt than that currently owed by the Agrokor Group and is designed to avoid lending between companies (other than normal trading) – these two improvements will significantly reduce the probability for a similar situation to arise again in the foreseeable future.

  • Can the debt or equity be sold, if so, how and who can buy it?

Both debt and equity at the level of the ultimate/top holding company and any recovery debt at the level of HoldCo will be transferrable instruments. However, sales will be limited to existing lenders and a pre-agreed list of acceptable potential investors. In addition, any recovery debt will likely be “stapled” to the debt and equity pieces issued at the level of the ultimate holding Company for a certain period of time to ensure that all investors hold instruments at both levels to provide initial stability, meaning that the instruments can only be sold together.

  • When can any instruments (debt or equity) received in the settlement be sold?

All instruments can be sold immediately, subject to the restrictions mentioned above.


Asset transfer

  •  How do you decide if a company is insolvent or not?

 For the means of the settlement plan, a company is deemed insolvent if it is over-indebted, i.e. if its debt, including guarantees, exceeds the value of its assets (on a going concern or fair market basis).

  •  Why are the assets transferring to new companies?

Asset transfers are proposed in order to achieve the EA law’s goal – a restructuring ensuring liquidity, sustainability and stability of the Group companies’ businesses eliminating legacy liabilities not appropriately registered, following an analysis of each of the companies’ circumstances, but ultimately subject to a creditor vote.

  •  How do you decide whether a company or its assets should be transferred?

 Non-Croatian solvent companies are transferred by means of a share transfer. For Croatian companies the transfer mechanics depend on whether the company is solvent or insolvent. If the company is solvent, the shares Agrokor currently holds are being transferred to the new structure. If the company is insolvent, its assets are being transferred to a  newly established company in the new structure with the empty shell left behind in the old structure.

  •  Will creditor returns be different if shares are transferring instead of assets?

 Creditors’ claims against non-Croatian companies or Croatian companies that are solvent remain unimpaired. Creditors with claims against insolvent Croatian companies will receive a strip of debt and/or equity at the level of the ultimate holding company and the recovery debt at the level of HoldCo.

  •  Is a transfer like this legal?

 The Extraordinary Administration Act provides for transfer of assets (Art. 43 para. 5).


  • Do all of the assets and liabilities of a company transfer?

 Save for certain valueless or non-core assets not required for the operational business, all assets will be transferred. Post-petition liabilities will be transferred as well, whereas unregistered pre-petition liabilities will be left behind and registered pre-petition liabilities will be replaced by recovery instruments in the new structure.

  • How will the current concession agreements be treated in this process?

They will, as expressly allowed in the law, transfer through the settlement agreement to the new companies.




  • Who will run the company after the settlement?

 The HoldCo will be run by a two tier board consisting of a management and a supervisory board, as is common in continental Europe. Individual members of the boards will be elected by the creditors that will become the owners of the group.

  •  How will the new board be chosen?

The company, the Creditors Council and the future equity owners will start a board search process with a reputable executive search firm in advance of the settlement.

  •  Will the new board be Croatian?

 The board search will be focused on finding experienced managers suited to run a multinational group, who do not necessarily need to be Croatian nationals.

  •  What is the Extraordinary Trustee’s role after the settlement?

 The rights and obligations of the Extraordinary Trustee will automatically terminate upon the group’s emergence from Extraordinary Administration.

  •  Will the new board members have a mandate to prevent systemic risk going forward?

 The board has a duty of care towards the company it represents and is obliged to act in the best interest of the company, which includes ensuring its long-term viability.


Other questions

  • Will the settlement plan deal with the systemic risk associated with Agrokor?

 The new structure (1) will result in a significantly lower level of debt than that currently owed by the Agrokor Group and (2) is designed to avoid lending between companies (other than normal trading) and to establish at-arm’s-length relations between the companies. These improvements will significantly reduce the potential for a similar situation to arise again in the foreseeable future. Further options to ensure sustainability are being considered.

  •  Is this sort of proposal normal or international standard?

 Yes this proposal is in accordance with international standards and best practice.

The EA Act as a regime for an economically significant company such as Agrokor is neither unique nor surprising in this situation. For example, Italy introduced the concept of extraordinary administration proceedings into its local legislation in 2003, which was enacted in connection with the Parmalat collapse and has been recently amended to address the financial restructuring of certain Alitalia group companies.  Many countries around the world have introduced special legislation to deal with systemically important companies or types of business – this is most often seen in relation to the banking sector but also applies to many other important industries.


  • What happens to the current Agrokor group?

 Agrokor group’s business will be transferred to the new structure and the operational business will continue unaffected. Following completion of the transfer, the remaining old shell structure will be liquidated.

  •  What will happen to the Todorić family?

 The Todorić family will cease to be shareholder of Agrokor group upon implementation of the settlement.


Follow up

  • When will more information (including financial information) be provided?

 Further information will be provided once further progress on the settlement plan has been made as and when appropriate.

  •  Will there be regular updates between now and voting on the settlement?

The Extraordinary Trustee and his team will endeavor to publish updates from time to time as and when appropriate and in line with international best practice.

  •  How do I ask questions not answered in the Q&A or presentation?

 Please email

  • Will creditors with separate rights of payment be paid in full?

The rights of individual creditors and the value of any secured assets are taken into consideration in calculating the level of recovery they would achieve.

  • The Association of minority shareholders would like to see the Group unburdened from the guarantees provided to many stakeholders prior to 10 April 2017 – is this realistic?

The guarantee providers have specific rights, as do many of the other creditors, who supported the group in the past and currently.  The restructuring proposal is designed to respect those rights and fairly and equitably assign value to stakeholders.  In any event the legal advice provided to the Extraordinary Administrator has confirmed the validity of the guarantees.

  • Why were minority shareholders or rather the General Assemblies of companies not advised at the time when the burdens of guarantees (collaterals) regarding specific brands were arranged for the benefit of securing the SPFA?

Under Croatian Companies Act the approval of the Shareholders’ Meeting is not required for the assumption of guarantees. It is within the exclusive responsibility and competence of the Management Board.

  • It has been alleged that certain SPFA creditors (such as Knighthead) and advisers to the Extraordinary Administrator (such as AlixPartners) are under some sort of obligation to make a public offer for the take-over of shares held by minority shareholders- is this true?

The SPFA lenders and advisers to the Extraordinary Administrator are not and have never been under an obligation to offer to take over the shares of minority shareholders.  This suggestion has no legal or factual basis.

  • Do you expect new owners/ management to significantly reduce the number of jobs in Agrokor?

The new owners of Agrokor will want to maximise the value of the group of businesses and the viability plans indicate significant potential to improve and grow the businesses.

  • Can Agrokor’s suppliers expect “business as usual” after the settlement is reached?

Suppliers are, in the main, already operating as usual and the group has stability – given the future prospects of the group it is to be expected that any remaining uncertainty will be further reduced following settlement.

  • What do you expect will be the amount of (sustainable) debt in the post-restructuring capital structure? What is the time period in which it is expected for this debt to be repaid?

The Extraordinary Administrators team is working on this and looking to ensure an appropriate sustainable structure is in place going forward which allows the business to flourish over the long term.

  • How is the voting process on the Settlement Plan structured, will some votes be more decisive than others?

The voting process is prescribed by the law.  Each Euro or Kuna owed, in relation to recognized claims, has the same voting power.