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Croatia's largest food company to expand with EBRD finance
Continuing its work to strengthen Croatia's industrial private sector, the European Bank for Reconstruction and Development (EBRD) will invest in the country's largest food processing company, Podravka. By subscribing to the equivalent of DM 50 million (ECU 25.4 million) of convertible preference shares, the EBRD will, upon conversion, hold about 10 per cent of Podravka's share capital.
The signing ceremony in Zagreb was attended by Hans Christian Jacobsen, the EBRD Director of Agribusiness, and Lindsay Forbes, the EBRD Deputy Director of the Croatia team, who said: "Podravka is one of Croatia's most important companies and one of the main employers in the Koprivnica region. This transaction recognises the efforts of management and employees to reorganise the company. The EBRD will actively support the continuing restructuring programme and help strengthen corporate governance through its seat on Podravka's supervisory board."
Ante Babic, President of Podravka's management board, said: "Over the last three years Podravka has worked intensively to restructure all of its business segments with significant support from the EBRD. It has focused in particular on products and markets which offer the largest potential for growth. The EBRD's investment is of great importance for Podravka and it will be used to finance future strategic investments. In addition, such an important investor will certainly strengthen and promote the reputation of Podravka among local and foreign investors."
Podravka will use proceeds from the EBRD's investment to finance the construction of a new plant in Koprivnica, as part of a capital expenditure plan totalling DM 300 million (ECU 152.4 million). The plant will produce Vegeta, a universal food seasoning which is a market leader in many countries of central and eastern Europe.
Podravka was established in 1947 and has become one of the largest food processing companies in the region, with a 1997 turnover of DM 660 million (ECU 335 million). Podravka's businesses include production of food additives, dehydrated soups, baby food, meat, fruit and vegetable processing and brewing. In addition, Podravka's subsidiary, Belupo, is the second-largest pharmaceutical company in Croatia.
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