Fortenova Group TopCo B.V., a Dutch holding company that is the umbrella owner of Fortenova Group d.d. in Croatia and the region, has decided to carry out a transaction that would change the ownership structure, excluding sanctioned shareholders, it said in a press release on November 29.

The agreement should complete Fortenova’s ownership restructuring, excluding SBK Art, owned by Russia’s Sberbank, which holds a 43.4% stake.

“This new ownership structure is intended to prevent further financial damage and operational difficulties, which have so far resulted from the presence of sanctioned equity-holders in the company,” Fortenova said in the press release.

Fortenova was formed from the restructuring of Agrokor, following a settlement with creditors of the troubled group. With operations in food production, retail and agriculture employing more than 45,000 people, it is the largest private employer in the Southeast Europe region.

The Dutch umbrella holding company has now reached an agreement with Open Pass Ltd., the largest unsanctioned shareholder (depository holder in the Fortenova STAK) of the Fortenova Group, which should result in a new ownership structure in which there will no longer be sanctioned co-owners. 

The agreement relates to the sale and transfer of 100% of the stake held by Fortenova Group TopCo B.V. in Fortenova Group MidCo B.V. to the newly established Dutch corporate structure, consisting of the Dutch foundation Iter STAK Stichting and the Dutch company Iter BidCo B.V., for an amount that can total up to €660mn, the company said in the press release.

“Out of the total consideration payable by the buyers for MidCo, €500mn is unconditional and will become payable at completion of the proposed transaction, while the payment of the remaining up to €160mn is dependent upon Fortenova Group reaching the financial goals set forth in the agreement, that should be made possible by this very transaction,” the company noted.

The payment of the remaining €160mn would depend on achievement of financial goals, primarily by the arrangement of a sustainable refinancing in 2024, under conditions better than the current, and reaching certain net debt-to-Ebitda ratio targets lower than the current level.

“If a disposal or listing of the company’s material amount of assets should occur within the next three years, the agreement sets forth possible additional payments to the current equity-holders that will not be part of the new ownership structure,” Fortenova added.

The agreed transaction should be approved by Fortenova’s stakeholders in mid-December.

Current equity-holders that are not sanctioned due to the Russian aggression on Ukraine will be able to either transfer their stake to the new BidCo or, by opting to provide an additional investment at own discretion, increase their ownership stake or elect to cash out and exit the ownership structure.

“The respective funds to be paid to the sanctioned equity-holders will be paid to a special account that they will be given access to once the sanctions regulations of the European Union, the US and the UK permit it,” Fortenova noted.

The new ownership structure will depend on the interest of the current non-sanctioned depositary receipt holders in additional equity investments.

“In order to ensure that the funds required for the transaction to be closed at the agreed price are available regardless of the level of the equity-holders’ interest in additional investment, Open Pass has committed to fund all the consideration payable, if necessary,” the company added.

The board of directors of Fortenova Group TopCo unanimously decided to approve the transaction and to put it to the vote of shareholders, after months of searching for a reliable investor to take over the company.