Emirati battles for control of Croatian conglomerate

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• Saif Alketbi wants to be recognised as largest shareholder
• Businessman previously worked for Dubai’s crown prince
• Fortenova had revenues of €5.2bn last year

A Dubai businessman has vowed to prolong his battle to be recognised as the biggest shareholder in a top Croatian company.

This is despite an adverse court ruling, hostility from the firm’s management and suspicions over ties to Russia.

In November, Saif Alketbi, a former member of the board of Noor Bank, bought a 43 percent stake in Fortenova Group by acquiring investment vehicle SBK Art LLC from Moscow-based Sberbank for €400 million ($436.5 million).

Yet Fortenova disputes the legitimacy of this deal and has prevented Alketbi from participating in its affairs.

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Fortenova has operations in retail, food production and agriculture.

Its annual revenue last year was over €5.2 billion and is cited as Croatia’s largest private employer, according to a semi-official government website.  

Fortenova has a complicated ownership structure which comprises several entities legally based in the Netherlands and one in Croatia.

In April, Fortenova announced it had begun searching for potential buyers of Fortenova Group MidCo B.V, which it says fully owns the group’s Croatian subsidiary Fortenova grupa d.d.

Fortenova announced last Wednesday that an Amsterdam court had rejected “all remaining claims” by Alketbi and SBK Art to halt the mooted sale of Fortenova Group MidCo.

The court concluded that Fortenova “has a legitimate interest in selling Fortenova Group MidCo” to ensure the “sustainability” of Fortenova’s finances which have “been compromised by the involvement of sanctioned parties in the ownership structure”, the company said in a statement.

The court also deemed that Alketbi – who served as director general of the office of Dubai’s crown prince from 2009 to 2016 – is not a shareholder in Fortenova, the statement said.

Yet in an emailed response, Alketbi said Fortenova’s management had abandoned its attempt to sell the company earlier this month, which made the latest Dutch court verdict of little importance.

Fortenova did not immediately respond to requests for comment.

Alketbi said he would take further legal action if Fortenova’s management, together with Open Pass – its second-largest shareholder – tries to offload the company again.

He described such a sale as “nothing more than an attempt to hijack the company and hand over valuable assets to a single shareholder”, namely Open Pass.

Pavao Vujnovac, owner of Croatia’s top gas supplier, PPD, is a Fortenova board member, according to his website, and controls Open Pass, which holds a 28 percent stake in the troubled conglomerate.

Alketbi launched his own attempt to take full control of Fortenova on June 16.

Complications

Fortenova was formerly named Agrokor. Russia’s Sberbank and domestic rival VTB Bank, which separately owns 7.4 percent of Fortenova, were major Agrokor creditors, having lent it €1.25 billion between them, according to Russian news agency Interfax.

The duo became shareholders of the renamed company in 2019 as part of a debt restructuring that saved the Croatian firm from bankruptcy, according to Reuters.

Sberbank had long sought to sell its Fortenova holding. However, that process was made more difficult following Russia’s invasion of Ukraine that led to wide-ranging EU and US sanctions on Russian entities.

An agreement to sell SBK Art to a Croatian pension fund consortium collapsed at the last moment, the Financial Times reported.

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That led to Alketbi’s deal with Sberbank.

He says the Russian lender’s perceived need to complete the deal quickly to beat an EU deadline meant that he first bought a Russian special purpose vehicle.

It in turn borrowed the money from Russia’s Gazprombank to fund the Fortenova acquisition.

Yet in April, Fortenova described “Sberbank’s failed attempts” to sell its holdings in the company, noting that an agreed period for a deal to be completed had expired.

As such, there were “no viable options available to dispose of the equity held by SBK Art”, Fortenova said when announcing management’s plans to instead sell Fortenova Group MidCo.

Fortenova said last Tuesday that its shareholders – excluding SBK Art and Alketbi – had approved refinancing up to €1.2 billion of outstanding bonds that includes a hefty additional fee to creditors it blamed on having sanctioned shareholders.

“The attempt to sell Fortenova was not conducted with the company’s interests in mind,” Alketbi said.

“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.”

The purpose was to ensure that Open Pass has effective control of Fortenova, with SBK Art denied its voting rights, Alketbi alleges.