Croatian parliament approves establishing inquiry commission for Agrokor

The parliament decided on Wednesday that an inquiry commission for troubled food-to-retail concern Agrokor will be established. The voting took place after ruling HDZ nodded to the SDP demands for founding such a body and after the audited reports showed huge losses accumulated in the past two years as well as irregularities in the financial statements. In return, the SDP voted for electing constitutional judges. A former justice minister from major opposition SDP, Orsat Miljenic, will chair the commission, which will comprise eight other persons. The commission should deal with technical issues by Oct 30 and then start with the actual work. It should finish the job in six months.

Meanwhile, Moody’s said in a release that the newly-published audit reports for Agrokor are credit negative. The rating currently assigned by Moody’s to Agrokor is Ca negative. Moody’s also says that it expects average recovery prospects for Agrokor’s creditors to be at the low end of the 35%-65% range commensurate with the current Ca rating. It also expects the recovery prospects of the senior unsecured notes to be less than 35%, in line with the C rating assigned to these instruments.

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