|
First EBRD direct equity investment in Ukraine's Svitoch
To assist Ukraine's first privatised confectionery company, Svitoch, with its modernisation programme, the European Bank for Reconstruction and Development (EBRD) is providing a US$ 10 million (ECU 8.8 million) equity and debt finance package.
"This is the EBRD's first direct equity investment in a wholly Ukrainian owned private enterprise," said Lindsay Forbes, EBRD Deputy Director of the Ukraine Country Team. "It is a direct result of Svitoch management's flexibility and openness to change. The financing will enable Svitoch to sell its confectionery at internationally competitive levels."
The EBRD's funds, US$ 8 million (ECU 7.1 million) of debt and US$ 2 million (ECU 1.7 million) in equity, will be used to purchase new production lines, install a financial accounting system to provide reports according to International Accounting Standards, and implement 'Svitoch 2000', a major programme to improve the efficiency and organisation of the company.
Andrij Tavpash, Svitoch's President, said: "The EBRD's finance will enable us to retain our position as Ukraine's favourite confectionery company. In particular, the new chocolate-making equipment will help meet the increasing demand for our products. We recognise that this is a new era and we are willing to ensure that the Svitoch name will continue to signify quality and consistency to our consumers."
West Ukrainian Commercial Bank has provided US$ 2 million for Svitoch's working capital needs. Significant progress has already been made with the 'Svitoch 2000' programme financed with technical cooperation support from the European Commission's Tacis programme and the United Kingdom's Know-How Fund.
As Ukraine's oldest and largest producer of chocolate, biscuits and other confectionery products (it was founded over a century ago in L'viv, western Ukraine), Svitoch has become one of the most widely recognised confectionery manufacturers in the region. Svitoch was privatised in 1990, prior to Ukrainian independence. In 1996, it produced 38,000 tonnes of confectionery products.
|
