Bojan Pongrac, Director of Merkur International in Belgrade - Optimism after General Assembly

Bojan Pongrac (Photo: ekapija.com)

The General Assembly of Slovenian company Merkur made the decision on Friday on recapitalization of that home appliance store chain. Merkur's creditors are offered two options - to convert their claims into the shares of Merkur or to collect 60% of claims over the next five years and write off the remaining 40%.

Bojan Pongrac, the Director of the company Merkur in Belgrade, speaks for eKapija about the optimism after the General Assembly and the company's plans for the future.

eKapija: How does the plan for the recapitalization of Merkur DD look like?

- The Assembly made the decision to enable changes in the company's ownership structure. All creditors who are owed money by Merkur are classified into four groups. Those who don't have insured claims are candidates for turning their claims into a stake in Merkur. All creditors who have already field their claims are given one month to decide whether they are willing to convert their claims into a stake in Merkur at the price of EUR 40, that is, EUR 53 per share. The second option is that they collect 60% of claims within next five years and write off the remaining 40%. In case of bankruptcy, which would be the other option if the forced settlement failed, creditors would collect only 26% of their claims. However, Merkur DD has 30 markets in Slovenia and it is a big piece of cake for suppliers.

eKapija: In your opinion, which solution is better - changes in the ownership structure or repayment of part of claims?

- In order for the recapitalization to be successful, it is necessary that minimum 85 million euros worth of claims, the total value of which is about EUR 600 million, be converted into stakes. Those who think that the value of Merkur's shares will grow and who are ready to make a long-term investment should convert their claims into stakes. Those who think that "a bird in the hand is worth two in the bush" will collect their claims. Maybe some suppliers will not lose much in this way since their profits are significantly high.

eKapija: It has been mentioned that the Government of Slovenia will help Merkur come out of the crisis.

- That would maybe be a good move, but the state's participation in the restructuring process is simply not possible. It would be possible only if some banks partially owned by the state had their stakes in Merkur.

eKapija: The trust of banks is growing. You have been granted a loan of 35 million euros for the procurement of goods. Is there any optimism?

- Merkur DD has been granted a EUR 35 million loan for the procurement of new goods, which should help us fill the shelves and run our day-to-day business as we should. This good first step gives us strength. There were skeptics who thought we would stumble at our first step (General Assembly). Fortunately, the number of such people is constantly decreasing. These 35 million euros give us a strength to keep on going. The first 5 million euros were spent on new goods in February. It is now up to us to work more carefully because we are out of stocks.

eKapija: How does Merkur's situation in Slovenia affect the operations in Serbia?

- What happened at the General Assembly was also well-received in Serbia. Merkur International, as our daughter company, was only indirectly affected by the situation in Slovenia in terms of the lack of real goods, which was "a better half of our product portfolio" in Serbia. That portfolio comprised our own trademarks and exclusive goods. We are getting ready for spring and we will again have the offer that is typical for Merkur. Major share of our financial obligations will be settled in April and that is when there will be more money for suppliers, stocks, development. We are awaiting May with a great optimism.

M.K.