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EBRD provides loan and equity to Barum Continental in Czech Republic
A leading Czech tyre manufacturer will be able to increase its local market and export strength through a loan and an equity investment from the European Bank for Reconstruction and Development (EBRD). Barum Continental spol s r.o. (Barum Continental) will modernise its tyre manufacturing plant and distribution business in the Czech Republic under an agreement signed today in Prague.
Ron Freeman, First Vice President of the EBRD said: "The EBRD welcomes this transaction, as a further step in developing a vital part of the automative industry in the Czech Republic. The project complies with the Bank's strategy for the Czech Republic in supporting an export-oriented, foreign-exchange-earning company and in catalysing foreign investment".
Barum Continental, a Czech limited liability company, is a joint venture between Barum Holding a.s. and Semperit Reifen Aktiengesellschaft and has become fully integrated into the Continental Group since formation of the joint venture on 1 March 1993. It manufactures and sells automotive tyres for passenger goods and agricultural vehicles and has a strong Czech dealership network as well as a strong export history. Western Europe exports account for approximatively 40 per cent of sales, with the remaining approximately 60 per cent of sales generated in the domestic market.
The EBRD will provide an equity investment of CK 575 million (ECU 16.7 million) and a loan of DM 70 million (ECU 36.7 million). The loan comprises an "A loan" of DM 25 million (ECU 13.1 million) for the Bank's own account, and a "B loan" syndication of DM 45 million (ECU 23.6 million) with BHF Bank, Commerzbank, Creditanstalt Bankverein, Dresdner Bank, ING Bank and Norddeutsche Landesbank as participating banks.
Barum Holding, a.s. and Semperit Reifen Aktiengesellschaft (a 95 per cent owned Austrian affiliate of Continental Aktiengesellschaft and responsible for central European operations of the Continental group of companies, the "Continental Group") will be shareholders respectively with 24 per cent and 51.56 per cent and the EBRD with 24.44 per cent.
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