Fortenova slashes debt since emerging from Agrokor restructuring
Fortenova, the Croatian food, drinks and retail group, has slashed its gross debt by more than a third since the restructuring of what was formerly Agrokor.
Since embarking on a new business strategy in 2019, complete with a number of divestitures and under its new identify, Zagreb-based Fortenova has cut debt to €650m ($757.1m) from as much as €2bn.
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The business revealed the figures as it announced what it said is an “important step in the further stabilisation and strengthening of its financial position”.
That involves the refinancing of €500m in debt with Zagrebačka bank and UniCredit Group, which will take effect from 1 October, according to a statement.
Fortenova added that since 2019 it has “systematically been implementing its deleveraging strategy by divesting assets and increasing profitability, whereby it was able to significantly reduce its leverage”.
The group suggested its net-debt-to-EBITDA ratio is “within the range that corresponds to investment [grade] credit rating”.
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By GlobalDataAgrokor was the largest consumer goods business in the Balkans until it was put into state-administration in 2017 amid huge debts and accusations of fraud by its founder Ivica Todoric.
Fabris Peruško was the head of the government-appointed Extraordinary Commission set up to oversee the recovery process post-Agrokor and he also then became CEO of Fortenova.
Commenting on the refinancing, Peruško said: “Following the change in ownership and the exit of sanctioned shareholders from our structure, we were able to fully dedicate our attention to the business, to restructuring the operational and real estate portfolio and to implementing our vision of the group’s future.
“I would like to thank Zagrebačka banka and UniCredit Group for the trust placed in us and look forward to our further collaboration.”
Fortenova now operates 29 production plants supplying food and drink products mainly to Croatia, Slovenia, Serbia, and Bosnia & Herzegovina, according to its website.
In food, the company owns the Zvijezda edible oils, sauces and deli brands, along with the Pik Vrbovec line of fresh and processed meats. It is also present in spreads with Dijamant.
Roto forms an offering of soft and alcoholic drinks, along with the Sarajevski Kiseljak brand of mineral waters.
Fortenova also owns and operates retail chains with the likes of Mercator, Konzum and Tisak.
Earlier this year, Croatian alcoholic drinks group Badel 1862 struck a deal to acquire local wine, cheese and olive oil maker Agrolaguna, and the winery Vinarija Novigrad, from Fortenova.
Divestitures also included a clutch of food and drinks assets sold to fellow CPG business Podravka. The deal featured fruit and vegetables processor Pik-Vinkovci and grains wholesaler Felix.
Podravka also took over Belje, which produces wines, dairy products and cured meats.
Damir Spudić, Fortenova’s CFO, added in the refinancing statement: “Behind us there are numerous key operations – from the divestment of non-core parts of the group to a number of processes implemented to additionally consolidate and improve the business through operational restructuring and strengthening the cost efficiency of our companies.
“The result are growing revenues and operating profits in all our key segments. At the same time, we have set a clear strategic framework for the forthcoming development period, where our focus will be on retail, food and beverage production and distribution.”
According to Fortenova’s website, the group generated revenue in 2023 of €5.9bn and adjusted EBITDA of €251m.
Just Food has asked the company for an update on more recent figures.
Meanwhile, the website says Fortenova acquired the local fruit- and vegetable-related businesses Enna Fruit and Naturala this year.
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