DUBAI, United Arab Emirates–(BUSINESS WIRE)–Yesterday, the court in Amsterdam found that SBK ART has the right to protect itself from disproportionate damage and claim compensation resulting from Fortenova management’s attempted sale of Fortenova MidCo.
While the Amsterdam court rejected an injunction sought by Mr Alketbi to prevent the sale attempt, company management’s abandonment of the sale process earlier in June eliminates the need for that specific court action.
Mr Alketbi, Fortenova’s largest shareholder, is closely monitoring Fortenova management’s next moves, together with his legal team. He intends to take further legal action if the company’s management, in concert with second largest shareholder Open Pass, try to resume attempts to impose a so-called “alternative solution”, which would see the company’s most valuable assets effectively handed over to a single shareholder without any due process.
In order to defend Mr Alketbi’s interests, SBK ART also filed a claim with the European General Court earlier this year to remove the wrongly-imposed EU sanction on SBK ART. Mr Alketbi is confident that the judicial challenge will succeed and that SBK ART will soon be able to exercise its voting rights again.
In a letter to international investment bank Lazard on 16 June 2023, Mr Alketbi declared a significant interest in acquiring Fortenova Group MidCo. B.V. at a reasonable price. He aims to present Fortenova’s shareholders with a viable, quality solution for the company’s future.
As announced by the company yesterday, Fortenova Group’s Depository Receipt holders approved the refinancing of debt worth over 1.1 billion Euros at an interest rate of nearly 12%, as well as a onetime cost of 6.75% (74-81 million Euros), extending the existing debt until November 2024. This is an onerous debt burden, and attempts by Fortenova Group’s management to blame this on the company’s ownership structure are at odds with reality. The management, instead of trying to find solutions which benefit the Group, is using the company’s problems as a pretext to lead the Group to an unfavourable solution that only benefits the management and Open Pass.
Mr Alketbi is advised by lawyers TA Advisory in Dubai, as well as legal counsel in other jurisdictions.
H.E. SAIF JAFFAR MARKHAN ALKETBI SAID:
“Fortenova Group’s management reached an agreement with HPS Investment Partners to extend the maturity of the existing bond, subject to a one-time fee of up to 81 million euros and an interest rate approaching 12 percent in line with rises in EURIBOR.
The management blames the company’s ownership structure for the high cost of the debt. This is another distortion of the facts. They themselves produced this instability by pushing their own agenda and ensuring that only Open Pass maintained a controlling interest.
The attempt to sell Fortenova Group via the process commenced in April this year was not conducted with the company’s best interests in mind. No party made any offer to buy the company, given the unrealistically short deadlines which the management imposed, as well as scare stories about the need to urgently refinance the company’s debt burden.
This was done by management in order to promote the ‘alternative solution’ offered by one party only – Open Pass. I am closely monitoring developments with my legal team. I fully intend to defend my ownership interests, and to thwart the attempt to implement such a plan, which would be extremely unfavorable for the company.
The refinancing agreement that has just been passed suggests that potential investors were misled. It shows that at the time when management was scaring investors about the debt due in September, it already had an agreement on refinancing.
I come with a quality solution for the future of the Fortenova Group which will settle its liabilities and dispel the need to sell vital parts of the company. It is regrettable that the refinancing was agreed with the obligation to sell key parts of Fortenova such as Belje, PIK Vinkovci and VUPIK, which underpin the Croatian economy. Fortenova Group excels in producing high-quality domestic food and wine, and my intention is to invest in the development of this area and strengthen the Croatian food industry. I have a solution that ensures the stability and development of the Fortenova Group, and I am ready to continue investing in the company.”
Background to the dispute:
Mr Alketbi indirectly owns 43.41 percent in Fortenova Group.
He bought SBK ART (the company which holds 43.41 percent stake in Fortenova) from Sberbank of Russia on October 31, 2022. Since then the company no longer belongs to anybody in Russia, despite claims to the contrary; nor is it under any Russian influence. At the time he bought SBK ART, the company was not itself on the EU sanctions list.
In April 2023, Fortenova and its management (including people related to Open Pass) started an unnecessary distressed sale process of the entire business. Fortenova received no bids. Fortenova’s management invited shareholders to offer an “alternative solution” to save the company.
Lazard has been retained by Fortenova management to explore the sale of MidCo, Mr Alketbi has asked Lazard to share information relevant to his offer, including the structure of the proposed sale.
Mr Alketbi is a citizen of the United Arab Emirates and a well-known businessman in his home country. He has never been subject to sanctions.
Conal Walsh / Andreas Grueter / Will Matthews
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