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Modernising retail chains across Serbia
€70 million to Idea in EBRD’s first project in Serbian retail sector
The EBRD is lending €70 million to Serbian retailer IDEA to help the company develop modern retail centres in the smaller towns of Serbia and to strengthen its capital base in order to finance further expansion.
IDEA is owned by Agrokor, one of the leading agribusiness groups in southeastern Europe.
This is the EBRD’s first investment in the Serbian retail sector. The Bank will syndicate €35 million of the loan to Alpha Bank Greece, retaining €35 million on its own account under the EBRD’s A/B loan structure.
The Serbian retail sector still underserved and fragmented compared to more mature markets, with only 25 square metres per 1,000 inhabitants compared to the EU average of 270 square metres.
“The project represents an opportunity for the EBRD to support a regional food retailer seeking to promote high quality standards of services and goods throughout Serbia while offering a highly diversified product mix,” said Hildegard Gacek, EBRD’s Director for Serbia.
The EBRD believes that the development of the retail sector plays a major role throughout the food chain and that its funding for a company committed to high quality standards will therefore have a visible demonstration effect on the rest of the market, Mrs Gacek added.
Founded in 1976, Agrokor is today one of the most successful companies in Croatia and the largest producer and retailer of food products – including mineral water, ice cream, edible oil, margarine and mayonnaise – in the country and regionally. More than 90 percent of the company’s products are produced in the region.
The EBRD has been our partner for many years and we are pleased that our successful cooperation has now been extended to other countries and particularly, in this concrete case, to Serbia, where Agrokor is undertaking significant investments. This EBRD investment in cooperation with the Greek Alpha Bank is a proof of confidence in Agrokor and its investments in Serbia, as well as confidence in the Serbian market. This investment will primarily benefit consumers all over Serbia and generate employment,” said Ivan Crnjac, Executive Vice President of Agrokor for Strategy and M&A.
With this project the EBRD is encouraging further regional economic integration by helping strengthen commercial and business relations in the region. The Bank has already supported several cross-regional projects, such as the modernisation of the confectionery producer Stark, expansion of the branded coffee producer Grand into Bosnia and Herzegovina, the Serbian snack producer Marbo extending its presence into the market of Bosnia and Herzegovina, the modernisation and expansion of Serbia’s largest ice cream producer Frikom and other.
This latest investment builds on the long-standing cooperation between the EBRD and Agrokor. In 2000, the Bank provided Agrokor with a €170 million syndicated loan for restructuring and regional expansion. In 2004 the Bank financed Agrokor’s ice cream subsidiary Frikom in Serbia with a €13 million loan and in 2006 the Bank invested €110 million for an equity stake in Agrokor.
In the agribusiness sector, the EBRD has directly committed more than €4.7 billion in over 320 projects across central and Eastern Europe and the Commonwealth of Independent States.
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