The Croatian food company Podravka, OTP Bank and the Hungarian oil and gas company MOL signed a settlement agreement on Wednesday whereby all claims and obligations between the contractual parties, deriving from contracts concluded in March 2009 regarding 10.64% of Podravka's shares, ceased, Podravka said in a statement via the Zagreb Stock Exchange on Wednesday.
The fulfilment of the contractual obligations under the settlement agreement will have a positive impact on Podravka's 2011 business result in that now it will be possible to release 19 million kuna of previously reserved funds, the statement said.
The contracts in question, signed on March 27, 2009, concerned the sale of 10.64% of Podravka shares that were registered in the name of FIMA AMI and pledged for a loan from Hungary's OTP Bank. The shares were formally owned by FIMA AMI and were given as a pledge for OTP and MOL's 37 million euro loan to FIMA to pay off its debt to Merrill Lynch, whose repayment was guaranteed by Podravka. In case of sale of the shares, Podravka undertook to pay the difference between the purchase and sale price of the shares.
Following a request from Capital Trust Company Limited of London and OTP Bank of Budapest, the investment company Interkapital sold 10.64% of Podravka shares held by FIMA AMI in July as part of an out of court settlement. The shares were purchased mainly by compulsory pension funds at an average price of 312.87 kuna per share.
Since the shares were sold at a lower price than the purchase price (according to media reports, it was 458 kuna), in late July OTP Bank asked Podravka to settle the difference of 11.58 million euros. Podravka said it would decide on further action after studying OTP's notification and that it would reserve an additional 20 million kuna from its 2011 business result.
