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EBRD financing assists private food-processing company in Bulgaria
The European Bank for Reconstruction and Development (EBRD) is making a US$ 1.75 million (ECU 1.4 million) equity investment in Storco A.D., one of Bulgaria's largest food-processing companies, and extending a US$ 8.25 million (ECU 6.6 million) senior secured loan. The funding will enable Storco to finance its post-privatisation investment programme, which includes the upgrading of its food-processing facilities, restructuring of its operations and the improvement of its raw material supplies.
"We are encouraged by the completion of this private sector project. This is the second project signed this month and confirms that there is a sound emerging private sector in Bulgaria that the Bank is keen to support," says Olivier Descamps, the EBRD Director of the EBRD's Bulgaria team. "The Bank is confident that Storco will stimulate, directly and indirectly, the local agribusiness sector, which traditionally has been a competitive segment of the Bulgarian economy."
Storco was privatised in November 1995 through the sale of 80 per cent of the company's share capital to Luxcraft Trading Ltd, a Jersey-based financial holding company, owned by the Geller Group. Bulgaria is famous for its high-quality agricultural products, and Storco is primarily involved in the production of processed fruit and vegetables.
Storco intends to take advantage of Bulgaria's competitive and geographical position in the region by expanding its export business. The Bank's financing will allow Storco to finance its investment programme, become a leading international exporter of processed foods, revitalise the local agricultural and food processing industry and gain a significant share in the local market. The company will be in a position to demonstrate the potential of the Bulgarian agribusiness sector, which is currently being privatised, and thus attract domestic and foreign investors to an area in need of capital.
To date the EBRD has signed a total of 12 projects in the private sector in Bulgaria for ECU 38.3 million (US$ 48 million) and six projects in the public sector for ECU 169.7 million (US$ 212 million).
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