A long-term EBRD loan of 420 million roubles (equivalent to EUR 10 million) will support the post-crisis balance sheet restructuring of Mir Detstva, a leading Russian distributor and producer of branded children’s goods, and help end its dependence on short-term funding.
The six-year secured loan will free up the group’s resources so it can focus on long-term development, including the creation of a transparent and more effective corporate structure, as agreed with the Bank.
The financial and operational restructuring this mid-sized company can now embark on is a good example of the benefits a partnership with the EBRD can bring, said the Bank’s First Vice President Varel Freeman.
The EBRD’s role is not just to offer loans but to help enhance the value of client companies. This is is precisely what local entrepreneurs need in order to transform their business models and regain competitiveness as demand recovers after the crisis, Mr. Freeman added.
The borrower, OOO Kompaniya Mir Detstva, was founded in 1994 and is one the few local players on the highly-fragmented Russian market in children’s goods where it is present in all segments except feed and diapers. It is best known for its branded products for newborn babies.
The Russian market in children’s goods has been growing at an annual rate of 16 percent in recent years and reached a peak of USD 6 billion in 2008 before the crisis hit Russia. After a recession in 2009, it began to recover in 2010.