Ljubljana, 10 June (STA) - Slovenia's largest grocer Mercator announced on Tuesday it had signed a deal with creditor banks and leasing institutions on extensive financial restructuring which would allow it to implement its strategy for turning around operations independently.
While details of the deal were not released, Mercator said it was one of the biggest and most complex financial restructuring arrangements in the region. The group's net financial debt amounted to EUR 977m at the end of last year.
The deal with the banks and financial institutions allows for the long-term financial stability of the company, a statement from Mercator reads.
It added that the move was a show of support and trust from the creditors in the independent operations of the group.
Chairman Toni Balažič said that the deal would allow Mercator to focus on its efforts to overhaul operations and return to profitability.
"The successful signing of this extremely complex and demanding financial restructuring process is proof that the company has managed in recent month to regain...the trust of the business community," Mercator chief supervisor Matej Lahovnik said.
While previously relying mostly on direct deals with individual banks, the restructuring deal will allow for consolidation of financing terms and conditions, the group said.
"The conditions which have been agreed with the banks will allow Mercator to turn the page and implement the required transition to a modern and successful retailer," the group said.
It added that the deal was in line with its plan for repayment of debt to creditors by March 2020 in line with its cash flow capacities and in a way that would provide for better liquidity and more investment.
The announcement comes as the takeover attempt by Croatian food group Agrokor for Mercator enters its final weeks.
The current offer of EUR 86 per share plus a EUR 200m recapitalisation, valid until 30 June, would see the Croatian group pay over EUR 400m for a 53% stake in Mercator being sold by a group of banks, some of which are also involved in the financial restructuring deal.