Proposed financing for Animex and related companies for restructuring its Polish meat processing operations and balance sheet.
The project aims to restructure Animex through: (i) corporate reorganisation; (ii) divestment of non-core subsidiaries; (iii) rationalisation of production facilities; (iv) implementation of management information systems; (v) selective capital investment to improve food hygiene and operating efficiency; (vi) investment in brand development (including packaging and distribution); and (vii) balance sheet restructuring.
The project is an opportunity for the Bank to participate in the restructuring of a large Polish company led by a leading Western strategic investor. The project would have a significant impact on the transition process in a number of ways.
Increased competition in the Polish meat industry would be achieved through the sponsor’s focus on improving the efficiency of plant operations, implementing new distribution arrangements and undertaking sales/marketing initiatives.
Commercialisation of a significant part of primary agriculture in Poland would be achieved through introduction of quality controls, best practice raw material sourcing methods and other linkages to pig breeding and rearing in Poland.
It would further prepare Poland for EU accession. Agriculture and the meat sector in particular are some of the most sensitive areas of discussion for EU accession.
Animex S.A. (and Animex affiliates, collectively "Animex") is Poland’s second-largest meat trading and processing company with approximately 15 per cent market share in its core businesses. Animex is listed on the Warsaw Stock Exchange and majority owned by Smithfield Foods Inc., the world’s largest integrated pork processor, which is listed on the New York Stock Exchange.
Loan to Animex of up to US$ 25 million (€27.3 million).
Total value of Animex syndicated loan is US$ 100 million (€109 million) in addition to US$ 50 million (€54.5 million) in sponsor-contributed equity.
The project was screened C/1, requiring an environmental audit of the company’s various facilities. Given the number of facilities and the consequent difficulties associated with auditing every facility, the due diligence was based on a detailed environmental, health and safety questionnaire. The review of the returned questionnaires, including follow-up investigations by the Bank’s environmental staff, and the discussions with Smithfield management responsible for such issues demonstrated that the facilities comply with the national requirements for environment, health and safety in line with Smithfield’s Corporate Environmental Policy. Levels of hygiene within the facilities are reportedly good, the plants are kept clean, and staff receive training in this respect. The review also showed that several of the plants are approved by the EU for the export of meat, and it is the company’s aim to bring all facilities to that level. The company will be required, in line with the EBRD’s Environmental Policy, to ensure that all facilities meet both national and EU requirements for environment, health and safety.
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