Arhiva Fortenova group - Page 3 of 6

Fortenova Group supports Croatian Government’s initiative to fight inflation Fortenova group

14.09.2023.

„Besides the package presented by the Croatian Prime Minister containing 30 groups of articles for which price ceilings have been set, Fortenova Group, and primarily Konzum, will set the total value of the list of 365 articles published by the Ministry of Economy back to the total value as of 31^st December last year, effective today. Apart from that, Konzum will start an additional discount on another 1000 articles today. We will thus invest EUR 10 million in prices on an annual level” – announced Fabris Peruško, Fortenova Group’s CEO and Member of the Board of Directors. He added that, since one year already, meat, edible oil and milk from the production companies PIK Vrbovec, Zvijezda and Belje were listed among the products with price caps, while the Government’s new, extended list contained additional articles from those companies.

Zoran Mitreski, CEO for Retail at Fortenova Group and President of the Management Board of Konzum, pointed out that the price discounts on 1000 articles will range from five to 40 percent, depending on the group of products, and the prices will be locked until year end. “We have strived to include almost all product groups that we sell – 50 percent from food, 50 percent from non-food, and it is important to note that our suppliers have supported this drive and that Konzum’s investment in prices until the end of this year will amount to around EUR 3.5 million” – Mitreski said.

All prices will be transparently published on Konzum’s website. Commenting on the Croatian Government’s fifth package of measures designed to help the Croatian citizens, Fabris Peruško said that Fortenova Group welcomed any initiative intended to lower inflation, with all Fortenova Group companies in Croatia taking part this time again. “As already mentioned when the first package was adopted, we as a company are aware of our influence in the society and want to support the Government’s efforts to restrain inflation”.

Court of Amsterdam Rejected All Claims by Sanctioned SBK Art and Saif Alketbi Fortenova group

28.06.2023.

The interim relief judge of the Amsterdam Court yesterday rejected all remaining claims by SBK Art and Saif Alketbi, essentially aimed at attempting to halt the sale process of Fortenova Group MidCo B.V. and dictate the course of that process, despite SBK Art being a sanctioned party without voting rights. This vexatious litigation by SBK Art and Saif Alketbi has now been rejected for the third time by the Dutch judiciary.

The judgment was made following the oral hearing of the parties held on June 14, 2023, where the court initially rejected the request to prohibit the convening of the depositary receipts holders’ meeting. Yesterday, both that decision and the present judgment rejecting all other requests by SBK Art and Saif Alketbi were thoroughly reasoned.

From the detailed reasoning of the judgment, especially noteworthy is the Court’s reaffirmation of the previous rulings that sanctioned individuals such as SBK Art are prohibited from exercising voting rights, either directly or indirectly.

Primarily, the Court concluded that Fortenova Group TopCo B.V. has a legitimate interest in selling Fortenova Group MidCo B.V. to ensure the sustainability of Fortenova Group’s financing, which has been compromised by the involvement of sanctioned parties in the equity structure.

The ongoing process of exploring interest in the purchase of Fortenova Group MidCo, according to the Amsterdam Court, has adequate safeguards to protect the interests of all stakeholders. The claims that Fortenova Group intends to eliminate SBK Art through the sale of MidCo to the second-largest unsanctioned shareholder at an unreasonably low price have been deemed “insufficiently plausible” by the judgment of the Amsterdam Court.

The Court also determined that SBK Art receives all the information to which it is entitled, while Mr. Saif Alketbi “is not a certificate holder and therefore, under the terms of the administrative conditions of Fortenova Group STAK, does not have the right to access information.”

The plaintiffs, SBK Art and Saif Alketbi, have been ordered to cover the legal costs and court fees of Fortenova Group.

Fortenova Group shareholders approved new financing arrangements Fortenova group

27.06.2023.

Fortenova Group invites shareholders to vote on bond refinancing Fortenova group

16.06.2023.

An invitation was sent today by Fortenova Group to the Depositary Receipt Holders for a Meeting to be held on 27 June, where they will, among other things, vote on the Group’s proposal to refinance the existing bond in the amount from EUR 1.1bn to EUR 1.2bn with the Group’s current majority creditor HPS Investment Partners.

In the materials for the Meeting, the DR Holders were provided with a detailed presentation on how the Group’s management, prior to putting the proposal on accepting the terms and conditions of the refinancing offered by HPS to the vote at the DR Holders’ Meeting, explored all other viable refinancing options that were available to Fortenova Group, including extensive discussions with regional and investment banks as well as bond market considerations.

After significant efforts to find financing with banks and bond markets, the Fortenova Group management has decided to enter a new financing for the period until 29 November 2024 with HPS, the existing leading non sanctioned creditor, provided that the DR Holders vote in favour of this proposal.

The conditions of the new financing of the entire amount of the current bond ranging from EUR 1.1bn to EUR 1.2bn offered by HPS in regards of margin and EURIBOR floor remain the same as for the current bond. The terms of the new bond include an Original Issue Discount, a one-off payment of 6.75 percent of the bond amount to be issued, which partly reflects sanctioned entities being in the Group’s capital structure and underlines the necessity of dealing with this problem as soon as possible. When the issue of the sanctioned entities being in the Group’s capital structure is resolved, Fortenova Group’s access to the banking market will reopen and the company will explore it again.

One of the terms agreed with HPS as part of the new financing is the commencement of a process for the potential divestment of Fortenova Group’s Agriculture Division by no later than 31 December 2023. Should the divestment actually take place, proceeds will be used for the Group’s further deleveraging or for strategic investments in the Group’s other core retail and food businesses.

With regards to its operating business, the Fortenova Group continues to perform extremely well. Preliminary unaudited results for 2022 show net revenues exceeding EUR 5.2 billion, operating profits according to IFRS-16 of more than EUR 470 million (adjusted operating profits of more than EUR 300 million), with EUR 1.1 billion of net debt of. Group liquidity was in excess of EUR 280 million and the Group achieved its best-ever ratio of total net debt to adjusted operating profits of 3.5 times.

Court of Amsterdam rejects yet another claim by sanctioned SBK ART and Saif Alketbi Fortenova group

14.06.2023.

Ivan Karadžić, izvršni direktor kompanije Mercator-CG i Hilmija Franca, izvršni direktor kompanije Franca

Mercator-CG and Franca sign Sale-Purchase Agreement Fortenova group

31.05.2023.

The company Mercator-CG and the retail chain Franca signed a sale-purchase agreement today, whereby Mercator-CG acquired the Franca retail facilities in almost all municipalities in Montenegro.

This is Fortenova Group’s first acquisition in the region, whereby the company has accomplished one of its strategic goals – to secure the strengthening of its store network on the SEE markets and its availability to the customers not only through organic growth, but also through acquisitions of local retailers.

The transaction was previously approved by the Competition Protection Agency and with its realisation Mercator-CG, which operates under the brand IDEA, has improved its offer to consumers and availability, ensuring a footprint covering the entire country.

Namely, the retail chain owned by the Franca family has 67 stores, with most of them – 13 to be precise – located in Podgorica, eight in Budva and seven in Bijelo Polje. With the acquisition of the new stores the retail network of the IDEA brand grows to almost 200 stores and with the takeover of 900 Franca retail employees the significance of the company Mercator-CG as one of the country’s largest employers shall grow as well, because following this acquisition the IDEA brand will employ more than 2 500 people. As employer, Mercator-CG has also assumed all contractual obligations towards its new employees.

On behalf of Mercator-CG the Sale-Purchase Agreement was signed by Ivan Karadžić, Executive Director of Mercator-CG, Ivan Antonijević and Boško Vuković, both Deputy Executive Directors of Mercator-CG and on behalf of Franca by the co-owners of shares and members of the Franca family: Hilmija Franca, Hatema Franca, Halida Franca, Sead Franca, Safet Franca and Halid Franca.

The agreement signing ceremony that finalised the transaction was also attended by Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, who stated on that occasion:

„Fortenova Group has strongly supported this acquisition pursued by the company Mercator-CG because it bears witness to the fact that we are implementing our strategy of strengthening the regional presence in retail. We have a clear vision of what we want to achieve in this business in all the five countries of our operations, we want to provide high-quality offerings and service, affordable prices as well as a strong footprint and a wide choice for our consumers. We can already clearly see the effects of synergies in retail that have started with the integration of Mercator in 2021 – from improved implementation and management to excellent collaboration with local suppliers, which has due to the shorter supply chains proved to be our key competitive advantage in the two recent crises. Given that the Franca family is a producer of high-quality fresh and processed meat, I am certain that the good partnership collaboration will continue in this case, too” – Peruško said.

Viewed from the angle of Hilmija Franca, Franca company’s Executive Director, with this acquisition Franca will consolidate its leadership position on the Montenegrin fresh and processed meat market. Franca will continue to be present on the market under that name, as one of the largest and most recognisable local brands. “The most important thing for us is that all 900 employees will stay employed with the new company” – says he and continues:

“To become part of a regional network and join forces with one of Montenegro’s largest chains means a great deal to us. We are exceptionally proud that our products will be present in all IDEA stores and thus even closer to numerous consumers. At the same time, I am sure that this partnership will also open the gates to other markets for us as leaders in our country’s meat industry. The focus of the company Franca will be on development projects in the primary processing industry and on strengthening exports to countries of the EU and the region. Like before, agricultural producers will remain Franca’s priority through repurchases. I believe that this important business step will be the beginning of new, great successes for all of us” – Franca said.

Ivan Karadžić, Executive Director of the company Mercator-CG noted on the occasion of closing the transaction that there was no doubt that this acquisition would be yet another stride in meeting business goals.

„This is an important point in our operations. The merger of the Franca store chain is an important step in our strategic development as it positions us as leader on the Montenegrin market and with around 200 stores the only chain present in all municipalities of Montenegro. With this acquisition our company shall also become the country’s largest employer with over 2 500 employees and I would like to use this opportunity to wish the more than 900 employees of Franca Markets a sincere welcome to our team. I am happy that they will become part of our company and that we will continue to meet the goals set as one team. With this acquisition and the focus on fresh, local, private label, the Super Card and digital transformation we are changing the retail market in Montenegro, improving our customer service and implementing state-of-the-art trends by using the power of the Group we belong to” – said Karadžić.

Zoran Mitreski, Executive Director of Fortenova Group for Retail and President of the Management Board of Konzum also highlighted the importance of the realised acquisition, particularly in the light of expanding the store network.

„We have strong investment dynamics within the system. Last year we opened more than 150 points of sale across the region, whereof 60 new and 90 refurbished ones. The formal takeover and integration of Franca will follow in autumn, as well as further investments and the continued exploration of further merger and acquisition opportunities in retail”, Mitreski announced.

On a different note, the Franca retail chain was established as part of the company founded by the Franca family in 1990, having started from the former meat industry “Meso-promet”. Over the last 30+ years they have developed one of the most significant production and retail companies on the territory of Montenegro, with a total of 1 500 employees. Franca has based its recognition on the market largely on local fresh and processed meat from their own farms, with their products present not only on the Montenegrin market, but also in the region and in some EU countries.

The realised acquisition will also mean the combining of expertise, technologies, brands and other resources of both companies and provide for a stronger market position, meeting different customer needs as well as assortment extension, primarily by offering premium local products.

The Fortenova Group is Launching Change of its Ownership and Capital Structure Fortenova group

26.04.2023.

The Fortenova Group is launching an international process for examining interest by potential investors for purchase of Fortenova Group MidCo B.V., a Dutch holding company that fully owns Fortenova grupa d.d. International investment bank Lazard has been hired to support this process. The collection of expressions of interest has just begun and the end of the process is not expected before the end of September 2023.

In the material distributed to the potential investors the Fortenova Group lists its unaudited, forecasted financial indicators for the year 2022 that show the stability of the operational business of the company, as follows:

Net revenues: Over EUR 5.2 billion

EBITDA IFRS-16: Over EUR 470 million

Adjusted EBITDA: Over EUR 300 million

Net debt: EUR 1.1 billion

Net debt / adjusted EBITDA ratio: 3.5x

Liquidity: Over EUR 280 million

The same material reminds potential investors that the market position of the Fortenova Group in the five countries of the region where the Group operates remains without comparison. The Fortenova Group is the largest retail chain and food producer in the sectors of beverages, oil production, meat production and processing and agricultural production, and tens of millions of customers know the company through a portfolio of more than 100 strong brands. The Fortenova Group is also by far the largest regional private employer, with over 45 thousand employees and around 30 thousand partners and suppliers, the vast majority of whom are local producers of the region’s market.

Sanctioned equity holders (Sberbank and VTBE) hold 49.9 percent of the equity in the Fortenova Group, and although the Fortenova Group itself is not subject to sanctions, the sanctioned co-ownership significantly complicates business operations and negatively affects the value of the company for all stakeholders. Primarily, it makes it impossible to reach a sustainable and efficient capital structure. Furthermore, following Sberbank’s failed attempts to dispose of its own equity in the Group, certain applicable licensing grounds to obtain a sanctions licence to implement the exit of the sanctioned DR holders have expired. Therefore, there are currently no viable options available to dispose of the equity held by SBK Art or Sberbank.

The refinancing of EUR 1.05 billion notes issued by Fortenova Grupa d.d. will be solved in the short term, most likely through the extension of the current notes for a period not longer than the end of 2024, with conditions similar to the current ones, but also with a significant additional one-time cost. Fortenova Grupa d.d. has received a non-binding offer for such an arrangement, which will likely be accepted in order to bridge the time period that is needed to resolve the issue with sanctioned and other non-eligible equity holders, such resolution to be in accordance with applicable sanction rules. If Fortenova Group’s equity structure remains unchanged at that time, it is likely that any subsequent refinancing under such terms will only diminish the company’s value for all stakeholders, including the equity holders and especially the non-sanctioned equity holders.

In the case of the potential sale of Fortenova Group MidCo B.V., the intention is to pay the Contingent Payment Rights – CPRs of Fortenova Group TopCo B.V. before any other payment from the collected funds, which in the amount of about EUR 78 million refer to the so-called “granični dug / border debt”, i.e. suppliers’ claims which were agreed in the settlement of Agrokor’s creditors in 2018/19 and were reinstated at Fortenova Group TopCo B.V. level.

Through this process the Fortenova Group intends to maximise value for all stakeholders including all equity holders, whether sanctioned or not. The equity holders of the Fortenova Group have been informed of the process and have been called to propose potential alternative solutions, should they have such suggestions.

At the end of the proposed process the Fortenova Group would no longer have sanctioned participants in its capital structure, that were mostly inherited from the settlement process of Agrokor’s creditors. This would solve the key obstacle in securing a favourable, long-term, sustainable new capital structure of the Fortenova Group and it would allow renewed international investment potential for the whole group.

Together against food waste Social Responsibility

22.03.2023.

Fortenova Group, Konzum, Zvijezda and PIK Vrbovec are among 33 signatories that have today signed the voluntary agreement on preventing and reducing food waste “Together Against Food Waste” with the Ministry of Agriculture.

The Agreement is intended to drive the food sector’s social responsibility, as well as collaboration, exchange of experience and defining of common goals and activities of the stakeholders involved, with the ultimate goal of preventing and reducing the generation of food waste in Croatia by 30 percent by the year 2028.

The Agreement is part of the Food Waste Prevention and Reduction Plan in the Republic of Croatia for the period between 2023 and 2028, as well as the reform measure “Food Donation System Improvement” from the National Recovery and Resilience Plan and is signed for a period of five years. Pursuant thereto, a working group will be established that will prepare a Common Annual Report, where the involved signatories are obligated to submit progress reports.

On behalf of Fortenova Group and its companies the Agreement was signed by Marina Burazer, Director of Marketing at Fortenova grupa d.d., Uroš Kalinić, Member of the Management Board of Konzum, Tomislav Alagušić, President of the Management Board of Zvijezda and Slaven Ružić, President of the Management Board of PIK Vrbovec.

“Fortenova Group, with its companies engaging in agriculture, production and retail of food, is aware of the importance of preventing and reducing the generation of food waste. We have signed the Agreement in order to contribute to the reduction of food waste as well as to influence the raising of public awareness of this topic by way of concrete and measurable contributions. Each one of us, both personally and at company level, can contribute to a solution and I am pleased to say that our companies have since many years been systematically working in that direction – from efficient stock management, raising public awareness and promotional activities for customers to food donations. Konzum, for example, has for five consecutive years been holding the title of The Best Donor, having donated more than 1 300 tonnes of food. Such initiatives are good for the entire planet, as well as for individual states, companies and consumers – all in all, they are in the common interest of all of us and deserve to be approached with due care” – Marina Burazer stated on this occasion.

Dutch court denies all claims made by SBK Art: All decisions of the Fortenova Group assembly are confirmed Fortenova group

13.01.2023.

Fortenova Group’s Assembly: Owners support all proposed decisions by vast majority of present shareholders Fortenova group

12.01.2023.

At the meeting of depositary receipt holders of Fortenova Group STAK Stichting, the ultimate owner of Fortenova grupa d.d., held today in Amsterdam, all proposed decisions were supported and adopted by the majority of more than 77 percent of present votes.

At two previous shareholders’ meetings where the same decisions were proposed, which were held on 18^th August and 30^th August 2022, the majority required to adopt the decisions was not present because the sanctioned shareholder SBK Art, under control of Sberbank of Russia, which holds 42,5 percent of voting rights, was not able to participate in the voting due to the sanctions. Pursuant to the STAK Articles of Association, the Assembly held today was the third in a row with the same agenda and the adoption of the decisions required the support of 75 percent of all present shareholders.

Thus the shareholders of Fortenova Group with voting rights adopted a number of decisions that will, to the benefit of the company and all non-sanctioned shareholders, facilitate the decision-making at future Assembly meetings, enable the further consolidation of Fortenova Group’s structure and operations and provide for the timely adoption of key business decisions. Thanks to the decisions of the Assembly it will now be possible to make new acquisitions or mergers or dispose of assets up to the maximum amount of EUR 500 million in 2023, subject to the prior decision of Fortenova Group’s Board of Directors, while they have also created the prerequisites for the refinancing of Fortenova Group’s existing debt and addressing various financial liabilities, also subject to the Board of Directors’ prior approval.

Besides the aforementioned decisions, today the shareholders with slightly more than 77 percent of votes cast by all present shareholders also voted in favour of extending the term of the members of Fortenova Group’s Board of Directors for another six years and appointed Fabris Peruško, Pavo Vujnovac, Damir Spudić, Maksim Poletaev and Vsevolod Rozanov for the next six-year period, providing with these decisions for the functioning of the BoD in the forthcoming period.

The Assembly was marked by an interest of shareholders that was higher than at previous meetings, as well as by the wide agreement of shareholders on the proposed decisions, as confirmed by the fact that out of the total 594 shareholders only 12 of them, or 2 percent of the total number of shareholders, voted against some of the decisions. The adopted decisions have thus, among other things, facilitated the company’s operations and extended the term of Fortenova Group’s BoD members which was about to expire.

“Fortenova Group’s management, with the support of its owners, remains focused on excellence in operational performance. When it comes to specific projects, priority shall certainly be given to the debt refinancing and further operational expansion, which we will now be able to realize regardless of the sanctioned shareholder without voting rights that will no longer be able to block the company’s normal operations with their inability to vote” – said Fabris Peruško, Fortenova Group’s Chief Executive Officer and Member of the Board of Directors, upon completion of the DR Holders’ Meeting.

Amsterdam Court Judgment Fortenova group

30.12.2022.

Sanctioned SBK Art cannot vote at Fortenova Group’s Shareholder Meetings

At its official website the Amsterdam Court of Appeal published its judgment according to which SBK Art, through which Sberbank of Russia holds 42.5 percent of votes at the Shareholders’ Meetings of Fortenova Group STAK Stichting, being a sanctioned company has no voting rights and cannot attend the meetings of Fortenova Group shareholders, i.e. Depositary Receipt holders.

This judgment is based on the construction of the way the sanctions imposed by the European Commission in November this year work, according to which the voting rights of shareholders under sanctions are explicitly considered to be an intangible economic resource and have to be frozen, i.e. their exercise must be prevented.

Today’s judgment has thus dismissed the judgment of another Dutch court from September this year, whereby SBK Art was allowed to partly exercise their voting rights in some matters. The Dutch Court of Appeal has fully applied the European Commission’s instruction from November, according to which the shareholders of sanctioned companies cannot exercise their direct or indirect voting rights under any circumstances nor for any purpose whatsoever, i.e. their voting rights have to be completely frozen.

The company SBK Art had appealed to the Dutch Court that they were not allowed to take part in Shareholders’ Meetings and exercise their voting rights. This judgment has dismissed all of SBK Art’s requests and confirmed beyond doubt that the sanctions rules prevented SBK Art from being accepted at the Shareholders’ Meetings and from voting at the Shareholders’ Meetings. SBK Art was also ordered to pay all court expenses related both to the dismissed and to today’s Dutch court judgments.

By way of reminder, with the Regulation of the EU Council No. 2022/2475 dated 16^th December 2022, which constitutes part of the ninth package of sanctions against legal and natural persons related to Russia and the Russian aggression on Ukraine, the company SBK Art LLT, through which Sberbank of Russia holds 42.5 percent of ownership shares in Fortenova Group, has been included on the sanctions list. In the statement of reasons it is specified that the purported acquisition of SBK Art, and through it of the ownership share in Fortenova Group, was actually an attempt to breach the sanctions regime which is in effect in the European Union and the United Kingdom. The inclusion of SBK Art on the sanctions list has confirmed beyond doubt that everything related to that company is subject to the Council Regulation concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, and any breach of the sanctions entails criminal liability for all citizens of countries of the European Union and the United Kingdom who may have taken part therein.

EU Council puts SBK ART on sanctions list Fortenova group

21.12.2022.

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