Transfer of retailer Mercator from Agrokor to Fortenova completed

Ljubljana – Slovenian retailer Mercator is in majority ownership of Fortenova after the transfer of shares from the troubled Croatian group Agrokor has been completed in line with the restructuring plan, Mercator announced in a press release on Friday.

After 18.5% of Mercator stock was transferred at the end of March, the remaining 69.6% was transferred today. Fortenova now holds a 88.10% stake in Mercator.

Fortenova is the successor to the collapsed food-to-retail concern Agrokor and the share transfer is part of a broader restructuring plan and ownership reshuffle.

Mercator was the last major asset remaining in Agrokor’s ownership.

The Mercator management sees the transfer as the beginning of a new era and an opportunity for development of all stakeholders. Senior officials asserted that Mercator’s seat would stay in Slovenia and that there would be no lay-offs. There is even the possibility of hiring, CEO Tomislav Čizmić said.

The head of the Fortenova Grupa, Fabris Peruško, said the transfer had been “long and complicated and even a bit painful at times”.

He said all required consents for the move had been obtained, including that of the Slovenian Economy Ministry. He thinks a key step was the refinancing based on the expansion of the existing financial agreement between the US fund HPs and the Russian bank VTB.

Fortenova has lent EUR 385 million to Mercator for the refinancing of its liabilities to 55 bank creditors. Fortenova issued bonds worth EUR 385 million whose buyers are HPS Partners and VTB Europe.

As the 20,000 of Mercator’s employees join the Fortenova group, the latter will employ more than 50,000 people, becoming the largest employer in the region. “Mercator is joining a family of excellent companies,” Peruško said, noting this would also be an excellent opportunity for all Slovenian suppliers.

Čizmić said the retailer’s earnings before interest, taxes, depreciation and amortisation (EBITDA) had gone from EUR 62.4 million to EUR 172.5 million in three years. The net debt and normalised EBITDA ratio dropped from 14 to five. Debt has halved and more than half of sales surfaces have been renovated, he said.

Both financial and business restructuring of Mercator have been completed, the CEO added, noting that a key investment in the future would be in logistics, in building a new logistic and distribution centre in Ljubljana, which would employ 450 people.

Čizmić sees the transfer to Fortenova as an opportunity for Mercator’s more than 3,000 suppliers and their brands. But he stressed that buyers had the main say. “The relations with suppliers are best regulated by the market,” he said.

Responding to the news of the transfer, Economy Minister Zdravko Počivalšek, who has in the past expressed some reservations about the transfer, mostly regarding the future status of Slovenian suppliers, said he was happy that after a few turbulent years, Mercator had gotten an owner and a favourable business environment.

“This is in the interest of all staff, Slovenian suppliers, consumers and the country in general,” he stressed.

The minister noted that the last report by associate member of the Mercator management board Gregor Planteu showed that Fortenova had offered long-term cooperation to Slovenian suppliers, thus securing them a spot on Mercator shelves.

“After all we have worked to protect Mercator and the future of Slovenian suppliers, more than 10,000 employees and their families,” Počivalšek said.

Now that Mercator’s transfer from Agrokor has been completed, Počivalšek said the government would propose the dismissal of Planteu, who has been a government trustee on the board of the retailer in line with a law that allows this to prevent the diversion of funds from systemically important companies.