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Creditors approve deal to save Croatia's biggest company

ZAGREB, Croatia (AP) — Creditors of the biggest private company in the Balkans, Croatian retailer Agrokor, voted Wednesday to approve a settlement deal that includes giving two Russian banks a stake of over 46 percent.

Some 80 percent of the 450 creditor representatives voted in favor of the deal, which avoids bankruptcy for Agrokor. The company employs 60,000 in the region and accounts for 15 percent of EU member Croatia's economy.

Fabris Perusko, Agrokor's state appointed caretaker, noted that the acceptance of the deal was greater than the two thirds majority required by law. Agrokor collapsed under the weight of 8 billion euros ($9 billion) in debt, including a disputed sum owed to two Russian state-run banks, Sberbank and VTB. The creditors include foreign and Croatian banks, suppliers and bondholders.

The settlement deal includes corporate restructuring that gives the two Russian banks a big stake in the company, prompting fears in Croatia that the Kremlin has been strategically trying to increase its political influence in the European Union's newest member.

According to the settlement, suppliers can expect to receive 60 percent of their claims on the company debt. Banks will get up to 20 percent, while for bond holders the return will range between 40 and 80 percent of their investment.

The implementation of the deal is expected to last between three to four months after a commercial court formally approves it. Ivica Todoric, Agrokor's founder and former owner, is fighting an extradition order in London after fleeing there last year, following accusations back home that he syphoned millions from the company funds and mismanaged the firm.

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