The centre-right majority approved the law, which will be implemented if Agrokor fails to reach a deal with banks and suppliers on a cash injection and restructuring. The law was criticised by opposition politicians who said it would threaten small suppliers and the state budget.
Under the law, devised to deal with potential financial troubles in a company with at least 5,000 employees and debt of 1 billion euros ($1.07 billion), the state will be able to appoint an executive to steer a restructuring process at the request of a debtor or at creditors' request with the company's agreement.
The law envisages a company reaching a restructuring deal within 15 months.
Agrokor is the biggest food producer and retailer in the Balkans with some 60,000 employees. It accumulated debts of about 45 billion kuna ($6.43 billion), or six times its equity, as it expanded rapidly, notably in Croatia, Serbia, Slovenia and Bosnia.
Agrokor, whose annual income equals 15 percent of Croatia's gross domestic product, struck a deal on Sunday with six lenders led by Russia's Sberbank and VTB to freeze debt repayments and get an unspecified cash injection.
In line with that, a restructuring expert was appointed to rescue the business. Antonio Alvarez III, of consultants Alvarez&Marsal, said on Tuesday there was no guarantee that the company could be saved.
Local food firms that supply Agrokor's retail chain Konzum, which controls some 30 percent of the local market, are owed some 16 billion kuna and they fear demands for payment could be affected by the restructuring.
One of the main problems between the banks and suppliers is factoring of promissory notes which suppliers received from Agrokor for delivered goods and then exchanged for cash, which the banks are seeking to get back from suppliers as they cannot be repaid by Agrokor.
"If there is no deal with banks today, we would support any other solution that leads towards helping suppliers to survive in all this," said Alen Fontana, chief executive of local dairy Dukat, adding that suppliers could be forced to stop delivering goods to Agrokor within the next 24 hours.
Reuters
