Fortenova, the Croatia-based food and beverage group, is inviting possible suitors to submit their interest in buying the company.
The business, home to brands including Zvijezda condiments and Jamnica soft drinks, has started “an international process” to examine what level of interest there might be in Fortenova Group MidCo B.V., a Dutch holding company behind the group.
Fortenova has hired Lazard and the company said it had started collecting expressions of interest. The process is expected to last into September.
However, 49.9% of the agri-food group is owned by sanctioned Russian banks Sberbank – through subsidiary SBK Art – and VTBE. Sberbank has tried to sell its stake in Fortenova since Russia’s invasion of Ukraine but failed.
“Although the Fortenova Group itself is not subject to sanctions, the sanctioned co-ownership significantly complicates business operations and negatively affects the value of the company for all stakeholders,” Fortenova said in a statement announcing its plan to weigh up buyer interest in the business.
“Primarily, it makes it impossible to reach a sustainable and efficient capital structure. Furthermore, following Sberbank’s failed attempts to dispose of its own equity in the group, certain applicable licensing grounds to obtain a sanctions licence to implement the exit of the sanctioned holders have expired. Therefore, there are currently no viable options available to dispose of the equity held by SBK Art or Sberbank.”
Fortenova, which employs more than 45,000 staff, emerged in 2019 after the collapse of Croatian food group Agrokor.
The company’s food and beverage assets include cooking oils, dairy, meat and fresh produce. It also owns the major Croatian food retailer Konzum.
In its statement, Fortenova said it generated net revenue of more than €5.2bn ($5.8bn) in 2022, with an adjusted EBITDA of “over” €300m. The company said it had net debt of €1.1bn and more than €280m liquidity.
Last June, Fortenova filed financial results for 2021 that included consolidated revenue from continuing operations of Hrk31.4bn, with consolidated adjusted EBITDA in the amount of Hrk1.96bn. Croatia joined the euro at the start of 2023.
Fortenova added: “At the end of the proposed process, the Fortenova Group would no longer have sanctioned participants in its capital structure, that were mostly inherited from the settlement process of Agrokor’s creditors. This would solve the key obstacle in securing a favourable, long-term, sustainable new capital structure of the Fortenova Group and it would allow renewed international investment potential for the whole group.”