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EBRD and Bank of America invest US$ 53 million in Hortex
Hortex, the leading Polish fruit and vegetable processing company, yesterday signed an agreement with the European Bank for Reconstruction and Development (EBRD) and Bank of America to pave the way for the modernisation and expansion of its operations. The agreement makes available US$ 53 million of new equity capital to Hortex over the next two years, starting with an immediate injection of US$ 28 million by the EBRD and Bank of America for a combined 41 per cent stake in the company. It is the intention of the company and its shareholders to list Hortex on a public stock exchange within the next three years.
Andrzej Szablewski, Chairman of Hortex’s Management Board, said: "This new investment was made possible by our successful financial restructuring in 1995 and Hortex's improving market position. The capital injection will allow Hortex to enhance its competitiveness on its domestic market and facilitate an expansion into markets to the east. Given Poland's expected accession to the European Union, the new capital will also help the company to meet new challenges in the areas of production, management information and environmental impact."
"In addition to its fine growth prospects, Hortex is a unique vehicle through which to support the Polish fruit and vegetable farming community", said Hans Christian Jacobsen, Director of the EBRD's Agribusiness Team. "Hortex provides a market and infrastructure for the collection of quality farm products while playing a crucial role in the provision of services and crop financing to its suppliers."
"We are impressed with the successful restructuring and repositioning of Hortex carried out by its management. We are delighted to back the company with additional growth capital and look forward to working with our new partners to extend the company's position as one of the leading consumer brand franchises in the region," said William Obenshain, Managing Director and Head of European Private Equity for Bank of America.
Jaroslaw Biernacki, Executive Vice-President of Bank Gospodarki Zywnosciowej (BGZ), a major shareholder in Hortex, commented: "This transaction is a milestone in Hortex’s restructuring. Under its new management, the company has enjoyed increasing operating profits over the past two fiscal years. The restructuring, consisting of debt write-offs and a comprehensive new business approach, has proven successful."
Przemyslaw Krych, Director of Equity Investments of Bank Handlowy, another major shareholder, and Chairman of Hortex’s Supervisory Board, added: "We are extremely satisfied with the entrance of our new prestigious partners and look forward to the realisation of our common goals. Bank Handlowy is reclassifying its Hortex equity stake from the 'restructuring' category to the stronger 'active' portfolio, as we expect rapid growth in the value of our stake."
In the 12 months ended May 1997, Hortex had sales of approximately US$ 230 million (25 per cent growth over the previous 12 months) and operating profit of US$ 45 million. Operating from ten plants across Poland, Hortex employs approximately 5,600 people. Following the new equity investment, the shareholding structure is as follows: BGZ 25.3 per cent, EBRD 20.5 per cent, Bank of America 20.5 per cent, Bank Handlowy 15.2 per cent and others 18.5 per cent.
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