Slovenian retailer said the formal basis for its re-entry into the Bosnian market was approved by the board of creditors of its parent company, Croatia’s food and retail concern Agrokor.
The transfer of possession and establishment of retail operations in 83 stores in Bosnia, currently run by Mercator’s peer Konzum, will take place gradually, Mercator said.
“Re-entry is based on positive experience from the period when Mercator managed its stores in Bosnia and Herzegovina. Integration after Mercator’s acquisition has resulted in a drop of revenue and had a direct negative impact on business efficiency of retail in this market,” Mercator said.
Mercator will acquire the equipment and inventory in Konzum’s stores, based on arm’s length principle
The board of creditors adopted commitments to Konzum’s restructuring in Bosnia, where it will manage 156 of its stores in the future. The restructuring foresees a capital increase of the Bosnian-based unit of Konzum. The restructuring of Konzum BH, however, does not include any transfer of liabilities to Mercator, the Slovenian company said.
“Mercator will acquire the equipment and inventory in Konzum’s stores, based on arm’s length principle, i.e. at market price, and thus mostly resolve its challenges regarding the existing receivables from its peer,” it said.
Following the takeover of Mercator by Agrokor, Konzum was put in charge of retail operations in Croatia and in Bosnia in 2014. Mercator’s fast-moving consumer goods stores in Croatia and Bosnia were leased out at arm’s length principle to Konzum.