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EBRD invests in the largest Bulgarian paper manufacturer
New funds from the European Bank for Reconstruction and Development (EBRD) for a privatised kraft paper and sack manufacturer will boost the development of the private industrial sector in Bulgaria. The US$ 15.4 million (ECU 14 million) financing for Celhart AD comprises a US$ 13.9 million (ECU 12.6 million) loan and a US$ 1.5 million (ECU 1.4 million) equity investment representing approximately 5 per cent of the company’s share capital. The International Finance Corporation is providing parallel financing for the same amount and on the same terms as the EBRD.
"This project is an example of successful restructuring of a privatised company", said Olivier Descamps, the EBRD’s Director of the Bulgaria team. He continued: "It provides much-needed post-privatisation finance for a large enterprise with high growth potential. It also encourages the inflow of foreign direct investment by supporting a foreign strategic investor."
With a total cost of US$ 44.6 million (ECU 40.4 million), the project will significantly improve the quality and capacity of Celhart’s kraft paper and sack production by modernising its production facilities. This will enable Celhart to meet the growing demand for kraft sacks in the domestic market while allowing Isiklar, the company’s majority shareholder, to secure a large part of the growing consumption of kraft paper.
Celhart, the largest of four paper mills in Bulgaria, is an integrated pulp/paper mill consisting of two independent pulp and paper production lines producing fluting and kraft paper. The company’s 100 hectare site is located in Stambolijski, 150 km from Sofia and 300 km from Istanbul. It is majority owned by Isiklar Holding, a leading Turkish industrial group with a dominant position in kraft sack manufacturing in Europe. Celhart was privatised in January 1997 in the first wave of the Bulgarian mass privatisation programme.
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