The EBRD is making an equity investment of €40 million in Victoria Group, Serbia’s largest private agribusiness company, to help the company raise corporate governance standards and expand operations.
Victoria Group operates the largest crushing seed capacities in southeastern Europe.
Its operations include edible oil, fertilizer, veterinary and animal feed production as well as grain logistics.
This transaction is the EBRD’s largest equity investment in the corporate sector in Serbia and the second largest equity investment in the country following the Bank’s acquisition of a 25 percent stake in Komercijalna banka in 2006.
The EBRD funds will be used to finance the company’s working capital needs and the restructuring of its balance sheet. The equity injection by the EBRD will provide a sustainable capital base for the further development of the company’s agribusiness operations. The EBRD will also be represented on the company’s Supervisory Board.
The balance sheet restructuring will support the group’s plans to invest further in higher value-added products for human consumption, such as soy-based products, which have application in the meat, pharmaceutical and confectionary industries. This will enable Victoria group to provide higher quality health food products to Serbian consumers than are currently available on the domestic market.
Hildegard Gacek, EBRD Director for Serbia, said that this equity investment is an important source of funding for a private company in Serbia where equity financing is very scarce. The Bank’s presence will not only help Victoria Group raise corporate governance standards and expand operations in other countries in the region, but will also help the company modernise and grow to the point where it can benefit from an alliance with a strategic investor or open up to capital markets, Hildegard Gacek said.
Victoria Group operates the largest crushing seed capacities in southeastern Europe.
Its operations include edible oil, fertilizer, veterinary and animal feed production as well as grain logistics.
This transaction is the EBRD’s largest equity investment in the corporate sector in Serbia and the second largest equity investment in the country following the Bank’s acquisition of a 25 percent stake in Komercijalna banka in 2006.
The EBRD funds will be used to finance the company’s working capital needs and the restructuring of its balance sheet. The equity injection by the EBRD will provide a sustainable capital base for the further development of the company’s agribusiness operations. The EBRD will also be represented on the company’s Supervisory Board.
The balance sheet restructuring will support the group’s plans to invest further in higher value-added products for human consumption, such as soy-based products, which have application in the meat, pharmaceutical and confectionary industries. This will enable Victoria group to provide higher quality health food products to Serbian consumers than are currently available on the domestic market.
Hildegard Gacek, EBRD Director for Serbia, said that this equity investment is an important source of funding for a private company in Serbia where equity financing is very scarce. The Bank’s presence will not only help Victoria Group raise corporate governance standards and expand operations in other countries in the region, but will also help the company modernise and grow to the point where it can benefit from an alliance with a strategic investor or open up to capital markets, Hildegard Gacek said.
This equity investment by the EBRD marks the continuation of the Bank’s successful relationship with Victoria Group since 2006, when the EBRD extended a €10 million loan to one of its subsidiaries, Victoria Oil, to increase oil production.
This was one of the first loans in the country provided to a local company using agricultural commodities as collateral. In 2007, the Bank provided a €45 million loan to Victoria ’s subsidiaries, Sojaprotein and Victoria Oil, for working capital and energy efficiency investments.
The EBRD’s projects with Victoria Group continue to be part of the Bank’s broader initiative and policy dialogue with the Serbian authorities on the introduction of a Warehouse Receipts Programme which will enable individual farmers to have access to working capital lines from commercial banks.
The EBRD is the largest investor in Serbia , having committed more than €1.4 billion in total 111 direct and regional projects. In the agribusiness sector alone, the EBRD has directly committed more than €5.0 billion in over 340 projects across Central and Eastern Europe and the Commonwealth of Independent States since 1991.
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