Croatia Mulls Special Law to Save Agrokor

The government is preparing to discuss a proposed Law on Procedures for Extraordinary Management, which many see as way for the state to step in and help the troubled private giant Agrokor deal with its serious financial crisis.

Under media pressure, the government in March admitted having held a secret meeting with the main owner of Agrokor, businessman Ivica Todoric, to discuss the company.

Last week, Economy Minister Martina Dalic announced the draft of a special law that would give the state a role in the crisis management of so-called "systematic companies", companies deemed vital for the normal functioning of the economy.

In such situations, the commercial court would name an extraordinary manager of the company - controlled by the Economy Ministry - which would help avoid the need for regular bankruptcy procedures.

Although Dalic denied that the law was being considered mainly for the sake of Agrokor, the media have nicknamed it "Lex Agrokor", since it only concerns companies with "8,000 or more employees". The only private company in Croatia that meets those criteria is Agrokor.

Economic analyst Domagoj Mihaljevic told BIRN that the law was clearly designed for Agrokor as it is "the only private company with over 8,000 employees".

He said the articles of the law unravel "the reality" of the company's de-facto bankruptcy.

"So far, we only speculated about what was happening with Agrokor … but now we have an official document from which we learn the situation. This is actually the official announcement that Agrokor faces bankruptcy and that the government intends to intervene in order to avoid bankruptcy proceedings," he said.

He noted that the law mentions "potential state aid ... but it isn't clear in what...