The City Assembly will hold a session tomorrow, from which the public will be excluded in order to declare, as we inform informally, the final decision on the reprogramming of the Zagreb Holding's loan.
Namely, the Management Board must reprogram the liabilities arising from the issue of bonds on the London Stock Exchange. Next year, they will be billed for 300 million, and if they had to pay it at once, Holding would be faced with major business issues.
As the Management Board at the past secret session of the Assembly of City Representatives asked for and obtained a framework for negotiations with commercial banks, it is logical to assume that tomorrow's agenda will find the final conclusion of the reprographic proposal.
However, as all city representatives and officials sign statements of confidentiality, it is impossible to obtain any official confirmation of this information.
But one thing is safe. To reprogram loans City and Holding, if Assembly approves them tomorrow, they must also obtain the consent of the Government. Because, local governments should not be indebted to this amount without government approval.
Although in this case the company is in the hands of a company owned by the City, for which no government approval is required, Zagreb will be a guarantor. And for this warranty, approval is required.
Such consent to the City and the Holding can only be given by the Government, not by a single Minister. The real question is whether we will have any Government tomorrow, and without that consent, Holding can not start the reprogramming process.
The government and government crisis has not only negatively affected the country's credit rating. If Holding does not obtain timely approval for borrowing, Zagreb will find itself in serious problems.
Indeed, Holding could be theoretically borrowed without the City's guarantee (as Government's borrowing is not required for Holding's debt but for City to be a guarantor), but its interest would probably be somewhat more expensive. But when the principal is 300 millions of euros, then every promo in the amount of interest is very important.
- Do not worry. We have already received the consent of the Government - they assured us today from Holding.