The collapse of Croatian retailer Agrokor Group, one of the most important employers in the Balkans, is sending shockwaves through the region. In April, the government rushed “Lex Agrokor” through parliament in a bid to save the company and prevent scores of bankruptcies among its supply chain. But creditors – including Fidelity, AXA and the Canadian Pension Plan – want their money back and the government itself might fall. Allegations of longstanding accounting fraud are also being levelled, and PwC is being lined up to investigate.
“Agrokor has transformed itself from the biggest private company into one of the biggest systemic risks to the Croatian economy,” Morgan Stanley’s economist Georgi Deyanov wrote in a note to clients. “The government’s action resulted in the implicit state guarantee of Agrokor’s short-term debt and arrears to suppliers.”
Full story & analysis from Bloomberg here: Billions Are Sinking Into a Balkan Black Hole