Russia’s Sberbank has initiated arbitration proceedings against embattled Croatian food company Agrokor and 11 of its guarantors over EUR450m (US$533m) in loans.

The Russian bank put the motion to the London Court of International Arbitration because it claims the funds should be repaid as a result of the extraordinary administration proceedings that are underway with Ledo, one of the company’s guarantors, according to a filing with the Zagreb Stock Exchange yesterday (24 August).

In conjunction with the arbitration process, Agrokor’s receiver, Ante Ramljak, has applied to the English court to have the extraordinary administration proceedings recognised in England and Wales. 

“The parties to the arbitration have agreed to stay the arbitration until Ramljak’s application has been resolved, which we anticipate will be November 2017 at the earliest,” Croatian ice cream maker Ledo said in the filing.

Agrokor announced in June it had secured a loan of EUR480m to “sustain” business operations amid a restructuring of the group, days before a 9 June final deadline set for creditors to submit a claim on the company.

Ramljak said in May it planned to break up Agrokor’s business units to be sold off within a year in a move aimed at paying down debts.

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