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Mercator shares transferred from Agrokor to Fortenova Group04/23/2021
Today 69.57 per cent of shares of Poslovni sistem Mercator have been transferred from Agrokor d.d. to Fortenova Group, whereby Mercator has become an integral part of the Retail Division of Fortenova Group, which now owns 88.1 per cent of Mercator shares. The transfer of Mercator shares was simultaneous with the refinancing by Fortenova Group of the debt that Mercator had with 55 banks, in the total amount of EUR 385 million. In cooperation with its creditors, HPS Partners and VTB, Fortenova Group has secured the required funds to entirely replace Mercator’s aforementioned debt and thus ensured seamless transfer of ownership of Mercator from a bankrupt to a stable company with a consolidated ownership and creditor structure. As of today, Fortenova Group’s retail network consists of around two and a half thousand Mercator and Konzum points of sale with a total of 39 thousand employees working on five markets in the region, with a population of almost 20 million people.
Agrokor had acquired Mercator shares in 2014, but until today Mercator was not operationally integrated into the business of its owner. “As of today Fortenova Group is proud owner of Mercator, decided in the intention to be the best owner that Mercator has ever had. This is a new beginning that opens up a number of new possibilities for all of us. Fortenova Group’s new, optimized capital structure provides for stability and the ability for strong investments in our companies going forward to drive their future growth. With Mercator within Fortenova Group we are consolidating the region’s largest retail network, increasing the stability of the supply chain, jobs and tax revenues of the countries in which we operate as well as opening new opportunities and continuing to support the growth of local suppliers” – said Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors. Peruško pointed out that following the integration of Mercator and the divestment of the Frozen Food Business, with over 50 thousand employees Fortenova Group will be the region’s largest employer, generating approximately EUR 5 billion in revenue, operating profits of more than EUR 270 million and planning for this year, in spite of the continued pandemic, to realize more than EUR 125 million of capital expenditures.
"Today’s closing of the additional financing to enable the Mercator transfer is fully in line with our strategic financial plans. We have made great progress over the last few weeks in delivering on our plans not only with this refinance arrangement but also with the Frozen divestment, other non-core sales and with a very strong Q1 business performance. At the heart of this has been a multinational, multi-location team that has been completing a really large amount of work and they deserve huge credit for all that has been achieved" – commented James Pearson, Fortenova Group’s Chief Financial Officer.
Siegfried Ganshorn, Fortenova Group’s Executive Director of Retail, called the transfer of Mercator to Fortenova Group “one of the most important days in the history of Mercator, Konzum and Fortenova Group”. “To be where we are today would not have been possible without our people, the professional management, the support and help of our suppliers and all other partners and stakeholders that we trust. Our joint efforts will enable us to utilize our full potential to the benefit of our customers” – Ganshorn said. As the crucial parts of Fortenova Group’s retail development strategy he singled out the operational excellence, the clear differentiation against competitors, the continuous improvement of the business’s position and increase in market share, the flexibility of microlocations and the true multichannel experience. “The foundation and the key factor that will enable us to realize that is the developed digital transformation strategy, due to which our significant investments will be into digital development and e-commerce, intended to drive growth in all countries” – Ganshorn concluded.
“Mercator today is not only a retailer, but much more. It is a platform connecting employees, customers and suppliers, that has successfully developed numerous new sales concepts. The employees’ knowledge, efforts, experience, abilities and sense of belonging are the creators of Mercator’s success. Being a company that cooperates with over three thousand suppliers and realizes purchases worth EUR 1.2 billion a year from local and regional partners, this merger provides a great business opportunity for the long-term development of their brands” – said Tomislav Čizmić, President of the Management Board of Mercator. In his words, along with the continued accelerated digitalization and the development of digital multichannel platforms, Mercator’s priorities in consolidating Fortenova Group’s retail are the strengthening of the store network and the development of a modern logistics infrastructure.
“Over the last two years since the Settlement Plan implementation and the successful financial restructuring of the overleveraged Agrokor, Fortenova Group was able to achieve a high operational performance, as reflected in increased operating profits by around EUR 100 million in the period from 2017 to 2019, as well as in a cash flow improvement of almost EUR 100 million during 2020, in spite of the negative effects of the COVID-19 pandemic on the operations. Fortenova Group has also strengthened its capital structure and improved its financial position, with the leverage ratio reduced from seven to around four times, as expected to be achieved by the end of this year. Hence, after a long period of uncertainty, today Fortenova Group is a financially stable company that is beyond any doubt capable of growth and that will, with its development strategy and by realizing its priorities, also preserve existing and open new jobs. I therefore wish all our colleagues from Mercator a warm welcome to the large community of Fortenova Group’s hard working and talented employees. I also look forward to continuing the cooperation with our key partners, small and large, local and global suppliers and to our common further growth” – concluded Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors.
" Agrolaguna is a company engaged in winemaking, olive growing and cattle farming on 1200 ha of cultivated land. "
" Konzum is the leading retail chain in Croatia with 700 stores serving more than 650.000 customers daily. "
" Belje is the biggest agricultural company in the region with 20,000ha of arable fields and cattle raising on over 20 farms, which ensures From field to table product traceability for Belje cheeses, traditional cured meat products and wines. "
" Jamnica is the largest Croatian producer of mineral and spring waters and soft drinks with tradition spanning 180 years. "
" Ledo is the largest manufacturer of industrial ice cream and the largest distributor of frozen food in Croatia. "
" PIK Vrbovec is the leading company in Croatian and region's meat industry with 80 years of tradition in the production and processing of meat products. "
" Zvijezda is the largest producer of edible oils in Croatia and the only producer of margarine, vegetable fat, mayonnaise and delicious mayonnaise-based products and ketchup in Croatia. "
" Tisak is the biggest retail newsstand chain with over 900 locations and Croatia's leading distributor of print and tobacco products, prepaid top-up cards, telecom operators' start packages and other products. "