|
EBRD, Russia's biggest private investor, and Baltika, Russia's largest brewer, toast key new growth financing
In a move signalling confidence in the outlook for Russia’s largest beverage producers, the European Bank for Reconstruction and Development (EBRD) has agreed to provide St Petersburg-based Baltika Brewery, the leading brewer in central and eastern Europe, with syndicated financing totalling US$ 40 million (EUR 38.5 million).
Hans Christian Jacobsen, Director of the EBRD’s Agribusiness Team, stated: "Baltika has a winning combination of strong management, cost efficiency, competitive pricing and ever-widening distribution that should ensure profitable growth for the company. It produces quality products for Russia’s large food and beverage sectors, where demand is proving resilient despite today’s difficult economic environment. The EBRD’s financing will help the company expand its reach throughout Russia."
The EBRD-led loan is one of the few internationally syndicated debt transactions to be completed for a Russian borrower in 1999. "This is the first Russian syndicated B loan for the EBRD since the country’s financial crisis in August 1998. The successful financing was structured as a corporate loan for a leading Russian borrower with only domestic sales," said Lorenz Jorgensen, Director of the EBRD’s Commercial Co-Financing Unit. Participant banks are FMO from the Netherlands and RZB from Austria, with an aggregate participation of US$ 8 million. The EBRD is providing the remaining US$ 32 million from its own account.
The financing will take the form of a seven-year senior secured loan. Participant banks are taking a shorter maturity than the EBRD.
"The loan from the EBRD to Baltika confirms the strength and stability of our relationship even during this challenging period," said Taimouraz Bolloyev, Baltika’s Chief Executive Officer. "Baltika’s success, aided by the EBRD’s confidence and support, is continuing this year as we maintain competitive pricing and expand our effective distribution network. This financing is our second transaction with the EBRD, following on the heels of the 1998 loan agreement with our St. Petersburg malting subsidiary."
Baltika Brewery, with its headquarters in St. Petersburg, is Russia’s biggest brewer, with sales of 4.9 million hectolitres in 1998. The EBRD’s financing is to be used for substantial development of Baltika’s production and distribution capabilities throughout Russia, including regions not currently served directly by Baltika. This will help the company respond to continually increasing demand for its products, and will complement strengthening of its working capital. Baltika is majority-owned by Baltic Beverage Holdings, a joint venture of Swedish-Norwegian Orkla and Finnish Hartwall.
|
