Balkan Debt

Location:

Serbia

Project number:

46888

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

25 Feb 2015

Status:

Repaying

PSD disclosed:

26 Feb 2015

Translated version of this PSD: Serbian

Project Description

The EBRD is considering provision of subordinated debt and equity to for the acquisition of the “Balkan Group”, consisting of “Danube Foods Group BV” and “Clates Holding BV” that own majority stakes in three leading FMCG companies in Serbia [and other Western Balkan countries], being Imlek a.d.- the leading Serbian dairy producer, Bambi a.d. - the leading Serbian confectionary producer and Knjaz Milos a.d. -  one of the major water and beverage producers in Serbia. The acquisition of Balkan Group is led by Mid Europa Partners (the “Sponsor”), a successful private equity firm focused in Central and Eastern Europe. The acquisition is expected to promote improved corporate governance, cost efficiencies and new product development, as well as further enhanced quality and environmental standards.

Transition Impact

The expected transition impact of the Project will be achieved through (i) setting standards for corporate governance and business conduct, (ii) strengthening backward linkages with raw milk suppliers, and (iii) the promotion of frameworks for markets as the company will actively contribute to the on-going policy dialogue aiming at increasing quality and efficiency in the Serbian dairy sector.

The Client

Adriatic Co-Investment LP, a limited partnership, for the equity investment and Adriatic TopCo B.V., a limited liability entity, for the subordinated debt. Both entities will be managed directly and indirectly by the “Sponsor” in relation to the acquisition and management of the “Balkan Group”.

EBRD Finance

Up to EUR 60.0 million of subordinated debt and EUR 20.0 million of ordinary equity.

Environmental Impact

The Project has been Categorised B in accordance with the EBRD’s 2008 Environmental and Social Policy (ESP) and E&S Due Diligence (ESDD) has been undertaken by independent consultants on behalf of the Sponsor. ESDD included visits by the consultant to a selection of the Balkan Group’s assets and document review to assess the current and historical operating performance of the business units of the Balkan Group that will make up the holding.  EBRD requested additional detailed ESDD to further understand the E&S risks for the Bank associated with the proposed transaction and the ability of the Parent to meet the Bank’s E&S Performance Requirements (PRs). At the conclusion of the ESDD a detailed E&S Action Plan (ESAP) was developed and will be incorporated into the financing agreements for the Parent to implement during and following the completion of the formation of the Parent.
 
The three separate business units will be combined and synergised, where possible, and the ESAP includes a number of items at a corporate level to centralise the E&S management functions to ensure consistent operating performance across the portfolio.  Several of the operations already broadly meet the Bank’s PRs while others have a number of corrective measures to implement, as detailed in the ESAP, so that the Project is structured to meet the PRs.
 

Technical Cooperation

None.

Company Contact

Mr Andrej Babache
Director, Mid Europa Partners
South West House
11a Regent Street
London
SW1Y 4LR
United Kingdom
 

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.