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.
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.
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.
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
EBRD participated in the bond issue with an amount of HRK 20.626 million
Total Project Cost
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
Company Contact Information
+385 1 2413 943
PSD last updated
15 Dec 2020
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