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November 5, 2020

Fortenova confirms frozen-food businesses on block

Croatia's Fortenova Group has revealed its intentions in regard to its frozen-food businesses, which have been linked to a possible divestment.

By Leonie Barrie

Croatia’s Fortenova Group has confirmed it plans to sell its frozen-food businesses.

The company has now opened the books on the assets to a “select number of bidders”.

The Zagreb-based company – successor to the collapsed Agrokor agribusiness and retail trade conglomerate – received a number of non-binding offers for the acquisition of the companies Ledo, Ledo Citluk and Frikom in September.

Ledo is the largest manufacturer and distributor of ice cream and frozen food in Croatia. 

In a statement, Fortenova said it “has decided to move forward to the next phase of the sales process by inviting a select number of bidders to start due diligence”.

James Pearson, Fortenova’s CFO, said: “The market test has confirmed that there is strong international interest among potential investors in our frozen food business. The qualified non-binding offers come from companies with outstanding investment and operational track record. We are glad that we will be entering due diligence process with some extremely strong potential partners.

“Our ultimate goal, over and above maximising value, remains to be selection of a strategic partner who will make the maximum contribution to the further development of the frozen food business group.”

The company said completion of the process will depend on finding the partner, which will recognise “the full value and potential of this business and its people”.

Fortenova has stated it wants to reduce debt and concentrate on growth in other areas.

Fabris Peruško, Fortenova’s CEO, said: “In order to proactively achieve our targeted capital structure via deleveraging the company, Fortenova Group is ready to dispose of only one segment of the core business, which potentially would be the Frozen Food Business Group.” 

He said he expects the due diligence process to be completed by the end of the year.

Fortenova emerged from the restructuring of the now defunct Agrokor, once the largest consumer goods business in the Balkans, which was put into state-administration in 2017 amid huge debts and accusations of fraud.

It emerged under its new identity in Spring last year backed by its predecessor’s creditors. Peruško was the head of the government-appointed Extraordinary Commission set up to oversee the recovery process. 

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