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EBRD supports privatisation and modernisation of Lithuanian wool textile company
To support the privatisation of Lithuania’s textile industry, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) are providing financing of US$ 16.5 million (€17.0 million) to Drobe, one of the largest manufacturers of pure wool and wool blend fabrics in central and eastern Europe.
The EBRD’s financing will consist of a US$ 9.9 million loan and equity investment, of which US$ 7.6 million will be provided from the EBRD’s ordinary resources and US$ 2.3 million from the EBRD’s Financial Intermediary Investment Special Fund (through a contribution by the International Cooperation and Development Fund, Taipei China). IFC’s financing will consist of a loan and equity investment totalling up to US$ 6.6 million. Both the EBRD and IFC are arranging a wide-ranging programme of technical assistance to help the company to maximise the impact of its modernisation programme.
George Krivicky, EBRD Director for the Baltic states, said: "Support for the industrial sector and promotion of privatisation, restructuring and sound corporate governance of domestic enterprises are key EBRD objectives in Lithuania. Funding for Drobe is an example of the Bank’s readiness to provide financing for the privatisation and restructuring of successful local businesses with a strong and dedicated management team and a clear strategic outlook."
Edward Nassim, Director for Central and Eastern Europe at IFC, said: "IFC’s participation in this project is a good example of our support for the resurgence of local entrepreneurship in Lithuania. The project should help Drobe to build on its demonstrated ability to sell quality products and to compete in European markets."
By modernising its manufacturing facilities, Drobe will be able to strengthen its position in Western markets, as well as in central and eastern Europe and the Commonwealth of Independent States (CIS). This project will help to complete the privatisation process in the Lithuanian textile industry. In helping Drobe, the EBRD and IFC are supporting the restructuring of a sector with significant export potential and a strong tradition in Lithuania.
The Dutch and Finnish governments have supported the project with trust fund finance administered by IFC. Dutch-financed advisers are providing supervision and guidance for the project as well as technical support for detailed implementation of the investment programme. Finnish-financed advisers are assisting Drobe in bringing its accounting and management information systems in line with international standards.
Other co-financiers in this project include private equity funds managed by CapMan Capital Management and Vilniaus Bankas.
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