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EBRD invests in Polish MPP auto components manufacturer
As part of its ongoing support for Poland's Mass Privatisation Programme (MPP), the European Bank for Reconstruction and Development (EBRD) is investing US$ 8.0 million (ECU 6.1 million equivalent) in Wytwornia Sprzetu Mechanicznego (WSM Krotoszyn), Poland's leading manufacturer of auto cylinder liners, and one of the most promising companies to participate in the privatisation programme.
Alain Pilloux, Director of the EBRD's Poland Team, said: "Having the EBRD as an investor means that WSM Krotoszyn is able to restructure and develop its operations, placing it in a very strong position to compete internationally. Its success may prompt other National Investment Funds (NIFs) and MPP companies to involve the EBRD as a stable investor."
Zdzislaw Bialek, Managing Director of WSM Krotoszyn, said: "In light of the increasing domestic and international demand for our products, the additional capital brought by the EBRD will enable us to implement our investment programme much sooner than anticipated and so meet this demand."
Under the MPP programme, the lead shareholding in WSM Krotoszyn belongs to NIF VI "Magna Polonia" whose fund manager is Chase Fund Management ("CFM"). Krzysztof Bialowolski, President of the Management Board of NIF VI "Magna Polonia" and chairman of CFM, added: "The Fund welcomes the EBRD's investment not only because it will accelerate the company's expansion programme but also because it endorses the company's development strategy and international standing."
Proceeds of the EBRD's equity investment will be used to finance the plant's modernisation, which includes installing two new, high-frequency furnaces and specialised equipment as well as restructuring the company's balance sheet. Once the modernisation programme has been completed the company expects that with its high-quality products it will become one of the leading European manufacturers of cylinder liners for the automotive and power generation industries.
WSM Krotoszyn is situated in Krotoszyn, a town in south-west Poland. Apart from the EBRD, which will hold 21 per cent, NIF VI has 26 per cent, minority shareholdings of 14 other NIFs equal 21 per cent, the Polish State Treasury holds 20 per cent and the management and employees have the remainder.
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