Govt Plans Deal to Protect Mercator’s Slovenian Suppliers

By , 10 Oct 2019, 12:45 PM Business
Govt Plans Deal to Protect Mercator’s Slovenian Suppliers mercator,si

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STA, 9 October 2019 - Economy Minister Zdravko Počivalšek expects that a draft agreement creating safeguards for Slovenian suppliers of retailer Mercator after its transfer to Fortenova will be ready soon. He was assured today that the retail group would not be cut up into pieces.

Počivalšek met representatives of Mercator suppliers, its bankrupt Croatian owner Agrokor, Agrokor's successor Fortenova, and its key creditor, Russian Sberbank in Ljubljana on Wednesday following reports that Fortenova was planning to cut off the Slovenia-based core company from its subsidiaries in Croatia, Bosnia and Serbia.

Related: Secret Plans to Cut Mercator into Parts to Repay Owner’s Debt to Sberbank

Speaking to reporters, the minister said that such a slash-up of Mercator would be unacceptable for the government. He was assured at the meeting today that a plan to that effect was not in the making.

He reiterated Slovenia's desire for Mercator to be allowed to continue to grow and develop. Being Slovenia's largest grocer, Mercator is an important company for the country in terms of jobs, suppliers and the revenue it generates, Počivalšek said.

He added that the government expected that the Slovenian suppliers would preserve an equal status under economic terms in the new group, and that Fortenova ensures Mercator's growth and development, and keep the group headquartered in Ljubljana.

"If they can guarantee us that, we won't have any problem with Mercator's transfer to Fortenova," he said, even though he does not have direct leverage on the process.

He noted that he had told as much to Russian officials at the Saint Petersburg Economic Forum last year and during Prime Minister Marjan Šarec's recent visit to Moscow, so he was critical the matter had not been dealt with.

He expects that Slovenian suppliers can agree a draft deal securing their present position on Mercator shelves also in the future with Fortenova and Sberbank within 10 days.

The suppliers' representative Izidor Krivec said the agreement could be agreed next week, by which time it needs to be aligned with the commitments negotiated by Croatian suppliers of Fortenova, as well a mechanism defined to monitor whether the agreement is being honoured.

The commitments would roughly pertain to a five-year period, but Krivec believes that they can keep their position also in the future as the consumer would dictate the choice on store shelves.

Fortenova's business policy would give priority to local suppliers, while Slovenian suppliers would like to come first in Slovenia, and right behind local suppliers in other markets.

Krivec also said that they had been given clear assurances today that Mercator would stay headquartered in Ljubljana, and that it would preserve its comprehensive business system.

Krivec expects Fortenova officials to honour their promises. Fortenova is to develop Mercator as the leading retailer in the region, invest in it and boost it. If so, Krivec is not concerned about Slovenian suppliers losing their market shares.

Agrokor's assets cannot be transferred to Fortenova until it gets a regulatory approval and the go-ahead from the 56 creditor banks of Mercator, including the Slovenian state-owned SID Bank.

When asked whether the agreement protecting Slovenian suppliers would prompt SID Bank to give its go-ahead, Počivalšek said the decision would be taken once the agreement was clinched.

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