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EBRD takes equity in Hungarian floor covering manufacturer
Hungary’s leading artificial leather, floor covering and wallpaper manufacturing company will receive an equity investment from the European Bank for Reconstruction and Development (EBRD) to enable it to expand production and restructure a recently acquired carpet manufacturing subsidiary.
The EBRD today purchased 300,000 shares, equal to 9.2 per cent of the outstanding share capital of Graboplast Textil-és Mübörgyártó Rt. (Graboplast) as part of the Company’s rights issue and private placement underwritten by Creditanstalt Investment Bank and lead managed by Creditanstalt Securities Ltd, Budapest.
Ron Freeman, First Vice President of the EBRD, said: “With this investment, the EBRD is financing a Hungarian management buy-out of a company which has been successfully privatised and restructured. As Graboplast is publicly traded on the Budapest Stock Exchange, it also demonstrates the EBRD’s confidence in the company and the Hungarian capital market. With Graboplast’s recent acquisition of Sopron Carpet Factory, the EBRD will also be assisting one Hungarian company to restructure another which is emerging from liquidation. The EBRD anticipates that management buyouts and company restructurings will rise in Hungary as privatisation now moves forward.”
Proceeds of the investment will be used to: expand the floor covering production capacity at Graboplast’s main Györ plant; make environmental investments to improve air emissions and control noise at the Györ plant; and to restructure and develop Sopron Carpet Factory Rt (Sotex), a Hungarian carpet manufacturer acquired by Graboplast in April 1995.
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