Provision of a structurally subordinated loan of up to EUR 15.0m with a seven-year tenor and bullet repayment at maturity (the "loan") to SEE Bakery Topco S.a.r.l. (the "borrower"), a limited liability company incorporated in Luxembourg that majority-owns key operating subsidiaries Mlinar Pekarska Industrija d.o.o (Croatia) and Hleb i Kifle d.o.o (Serbia) (jointly the "Group").
The proceeds from the loan will be used to primarily finance the payment of deferred consideration to the founder in connection with Mlinar's acquisition by Mid Europa Fund V. In turn, this will enable Mlinar (and its Serbian subsidiary Hleb i Kifle) to use the internally available and generated cash to implement the investment plan in Croatia and Serbia, which includes: (i) roll-out of new bakery stores; (ii) modernization and refurbishment of existing bakery stores; and (iii) purchase, installation, upgrade and maintenance of certain bakery production and other equipment.
Through the proposed project, the Bank will support the Group to advance its competitiveness by resuming its medium-term investment plan, which will enable it to implement its value creation plan and will lead to improvements in operational efficiency. In addition, the project will support the inclusion of senior workers (primarily women) and other target groups in the workforce by providing new accredited training programmes and learning opportunities.
ETI score: 64
- Competitive, the project will support operational changes leading to competitiveness improvements in the Group's operations in Croatia and Serbia beyond prevailing standards in the country/region, which will be possible by supporting the investment plan and value creation plan of the Group.
- Inclusive, as the Bank's project supports the inclusion of older workers (primarily women) in the workforce via the provision of a new, replicable and accredited training programme in partnership with (local) vocational schools or universities.
SEE BAKERY TOPCO SARL
SEE Bakery Topco S.a.r.l. (the "Borrower"), a limited liability company incorporated in Luxembourg that majority-owns key operating subsidiaries Mlinar Pekarska Industrija d.o.o (Croatia) and Hleb i Kifle d.o.o (Serbia) (jointly the "Group"). The Group is a leading player in the production, wholesale and retail of baked goods in Croatia, while it is present also in other SEE countries. The Borrower is fully owned by Mid Europa Partners ("MEP"), a leading CEE-focused private equity firm, via entities pertaining to its Mid Europa Fund V (the "Sponsor"), in which the Bank is an investor.
EBRD Finance Summary
Total Project Cost
EBRD participation is expected to provide an innovative and bespoke instrument with terms and conditions not available in the market (i.e. PIK loan with seven-year bullet maturity, structurally subordinated and unsecured). In addition, the project will qualify as Gender SMART, as it will introduce a target for training at least 200 women above the age of 50.
Environmental and Social Summary
Categorised B (ESP 2019). The operation of an industrial bakery and associated retail outlets is associated with a number of E&S risks that are well understood and readily mitigated. Given the nature of the loan, environmental and social due diligence was conducted at a corporate level and covered all activities of the Group. ESDD was undertaken by third party consultants, commissioned by the Group, and comprised a high level review of management of E&S issues in both the Company's operations and its supply chain.
The E&S review covered a wide range of topics including climate risks and resilience, E&S management systems, product stewardship, waste and water management, employee health and safety, community relations and stakeholder engagement. No significant, unidentified risks were revealed through the due diligence process. The review demonstrated that the Group's management of E&S issues is generally focussed on national compliance and is not done within the context of structured management systems. Certain areas are well developed, such as the management of health and safety, while other areas require further attention.
To address the identified issues, an environmental and social action plan (ESAP) has been drafted and agreed with the client. The ESAP focuses largely on management systems and includes actions for the client to further develop the H&S management system to include environmental aspects, integrate E&S considerations into supply chain management, develop management systems for energy and resource usage and develop a corporate level stakeholder engagement plan. The ESAP is structured to ensure Group's compliance with the Bank's Performance Requirements and the client will be required to provide annual E&S reporting on the implementation of the ESAP.
Technical Cooperation and Grant Financing
The project will be supported through a client co-financed technical cooperation (TC) which will advise the client on how to develop training and conduct outreach activities targeted at older workers and additional vulnerable groups. The estimated cost of the assignment is up to EUR 50,000.
Company Contact Information
Lena Habus (CFO)
+385 1 23 82 305
MLINAR pekarska industrija d.o.o. Radnicka cesta 228c 10000 Zagreb, Hrvatska
PSD last updated
17 Jun 2021
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