- Short-term liquidity of PLN 110 million (around €25 million)
- Company managing working capital needs caused by coronavirus pandemic
- Forward-thinking and preparation for potential second wave of Covid-19 in autumn
Faced with increased market volatility on the back of the coronavirus pandemic, Pelion, a Polish company operating in the pharmaceutical market, is taking steps to manage the challenges ahead with a loan of up to PLN 110 million (around €25 million equivalent) provided by the European Bank for Reconstruction and Development (EBRD).
The financing will offer short-term liquidity that will allow the company to actively manage working capital needs across business lines. Pelion, owned by the holding company Korporacja Inwestycyjna Polskiej Farmacji, is the largest wholesale and retail pharmaceutical distributor in Poland and Lithuania and is, as such, of critical importance to securing the availability of pharmaceuticals.
The transaction is the EBRD’s first project of several under preparation in Poland since the Bank adopted a Solidarity Package to help its countries respond to the economic impact of the Covid-19 crisis.
A Resilience Framework within the Solidarity Package allows for the provision of liquidity support, short-term working capital and the restructuring of exposures. In total, the EBRD expects to dedicate its entire engagement with up to €21 billion in the period 2020-21 to combating the economic impact of Covid-19.
Pelion plans to use the EBRD financing to build a liquidity buffer, actively respond to changing payment terms and increase inventory levels ahead of any possible second wave of Covid-19 in the autumn. The public health restrictions have led to a significant shift in consumer habits towards online shopping, which is only expected to increase. While the demand for medical products from private customers was strong in the first quarter of the year, the imposed restrictions led to lower customer traffic in the second quarter of the year.
Grzegorz Zieliński, EBRD Regional Director, Central Europe and the Baltic states, said: “As Poland copes with the coronavirus crisis and its longer-term impact, it is vitally important to act now to prevent future harm. Pelion is setting an example in forward thinking and the EBRD is very proud to support our partner in these efforts. As the biggest distributor of pharmaceuticals, the company’s health is of strategic importance for Poland and Lithuania.”
Jacek Szwajcowski, Co-Founder and CEO of Pelion, added: “Our partnership with the EBRD, which started last year, is of very high importance for our Group. The new facility, which allows us to build a liquidity buffer, will help us stay focused on taking care of our patients and customers.”
The EBRD started investing in Poland in 1991 and to date has provided €10.3 billion through 436 projects to all sectors of the economy.