DFF - Project Kaptol

Location:

Croatia

Project number:

52599

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Approval date:

01 Dec 2020

Status:

Signed

PSD disclosed:

15 Dec 2020

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The EBRD participated in a HRK 300m, 5-year local bond issue (the "bond") by Atlantic Grupa d.d. (the "company"), with the total amount of HRK 20.62 million invested. The bond has bullet repayment and fixed semi-annual coupons. The proceeds of the bond will be used to refinance the company's existing HRK 200m corporate bond and for general corporate purposes including financing of certain capital expenditures.

The company's performance has been resilient to the COVID-19 crisis thanks to the nature of its assortment, high brand recognition and well organised logistics system. However, a prolonged period of crisis and a lack of certainty over further restrictions pose risks to the company's operations.

Project Objectives

Through this transaction the EBRD will support the development of local capital markets, offering additional supply of local currency denominated assets to local pension and investment funds that currently have relatively few investment options apart from government securities and a very limited number of local corporate/FI issues in Croatia (just nine issuances in total since 2015). The new bonds will be listed on the Zagreb Stock Exchange ("ZSE"). Furthermore, this new issue will demonstrate that local markets can provide a viable and sustainable source of HRK funds for local corporates.

Transition Impact

ETI score: 60

The transition impact of the transaction will be mainly derived from two transition qualities:

- Resilient, the project will support the development of the local capital market.

- Inclusive, as the Bank's project supports the inclusion of youth in the workforce,via the provision of internships to a number of young people as well as increased cooperation with vocational schools and universities.

Client Information

ATLANTIC GRUPA DD

Atlantic Grupa d.d., Zagreb ("AG", "Atlantic Grupa", the "borrower", the "company" and the "Group"), one of the leading food and beverage producers and the leading FMCG distributor in SEE, with sales of EUR 724m and EBITDA of EUR 96m in 2019 on consolidated basis, and NFD to EBITDA of 1.3x. Atlantic Grupa is majority owned by the Tedeschi family (56%), Croatian pension funds (33.4%), management (0.9%), remaining shares being free float.

EBRD Finance Summary

HRK 20,626,000.00

EBRD participated in the bond issue with an amount of HRK 20.626 million

Total Project Cost

HRK 300,000,000.00

HRK 300,000,000.00

Additionality

The EBRD's participation is expected to provide additional comfort to both local and international investors which will be very important for the development of the liquid secondary market for the respective bonds (and in general for the development of the corporate bond market in the country). The client will also be supported in introducing a new internship programme in cooperation with vocational schools in Serbia and Zagreb School of Management in Croatia, covering different functions across finance, sales, marketing, e-commerce.

Environmental and Social Summary

Categorised B (ESP 2019) and Low Medium Risk.  The Atlantic Grupa is a former client of the Bank and the Bank has worked with the Company on a number of projects at both the Group level and with individual entities within the Group.   Performance and reporting on those previous projects was satisfactory and the Group demonstrated sufficient capacity, policies and procedures to comply with the Bank's Performance Requirements (PRs).  As a capital markets transaction, with limited direct access to Atlantic Grupa, environmental and social due diligence was based on review of publicly available information.  This included the 2019 (GRI compliant) Sustainability Report, the Quality Policy, the Code for Corporate Governance, and the Code of Ethics. Together these documents demonstrate a highly developed approach to management of environmental and social issues. The Company has dedicated staff at all levels and appropriate policies and systems that provide the framework for management of environmental, health and safety, labour and community issues. According to the latest report, activities are grouped in three dimensions i environment and energy efficiency, people and society, and governance. Targets are set for indicators such as waste reduction and energy use and outcomes reported within the Sustainability Report. With regard to human resource management, the Group has a range of policies and procedures concerning human rights, equal opportunities, working conditions, and health & safety all of which are made available to workers and are the subject of training.  Likewise, the Group has policies and requirements for suppliers integrated into a Supply Chain Management System setting minimum standards across a range of environmental and social areas.  Given the nature of this investment, it is not possible to undertake a detailed due diligence on the Group nor to set specific requirements within an ESAP.  However, the information reviewed gives sufficient comfort that Atlantic Grupa has appropriate systems and staffing in place to continue compliance with the Bank's PRs. Likewise, it will not be possible to agree reporting tailored to EBRD requirements and the Bank will therefore rely on public disclosures such as the Sustainability Report for on-going monitoring of the Project.

Technical Cooperation and Grant Financing

None.

Company Contact Information

Davor Orsic
davor.orsic@atlanticgrupa.com
+385 1 2413 943
www.atlantic.hr

PSD last updated

15 Dec 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

Share this page: