Don Don Debt

Location:

Regional

Project number:

47532

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

B

Target board date:

24 Jun 2015

Status:

Complete

PSD disclosed:

30 Sep 2015

Project Description

The EBRD is providing financing of up to EUR 10.3 million to Don Don Group (“Don Don”), one of the leading industrial bakeries in south-eastern Europe. The financing will be used for the acquisition of assets of Pekarna Grosuplje and the restructuring of the current loan portfolio of Don Don with a newly structured long-term financing coupled with a working capital facility provided by parallel lenders.

Pekarna Grosuplje is historically one of the leading bakeries in Slovenia and currently operates as an in-house bakery of the Slovenian retailer Mercator.

Transition Impact

The proposed transaction will demonstrate the successful restructuring of Don Don and Pekarna Grosuplje, two compatible regional companies in south-eastern Europe. The joint operations will benefit from the realisation of regional synergies which will lead to increased profitability. In addition, the project will bring improvements in corporate governance and business standards. This will be achieved by implementing a management information system across Don Don subsidiaries in the region, which will enable regular reporting to internal and external stakeholders as well as better budgeting and other decisions.

The Client

Don Don is one of the leading industrial bakeries in south-eastern Europe.

EBRD Finance

EUR 10.3m in the form of a long term loan to Don Don.

Project Cost

EUR 60 million.

Environmental and social categorisation, impact, and mitigation

The project was categorized B as the investments into the acquisition of a bakery are associated with limited standard environmental, health and safety, and social impacts which can be readily identified and addressed. The Bank’s Environmental and Sustainability Department (ESD) has undertaken a site visit and internal environmental and social sue diligence to review the Company's existing operational activities, regulatory compliance status and the EHS risks management to assess its capacity to comply with the Bank's Performance Requirements. Due diligence has established that the Company is generally in compliance with local legislation and the Bank’s PRs. The potential adverse effects are moderate and are associated primarily with air emissions, water consumption, labour conditions and social aspects. An ESAP aimed at addressing the issues identified and ensuring that the Project is structured to meet the EBRD’s performance requirements has been developed and agreed with the Company. It focuses primarily on the improvements of the overall E&S system and safety upgrades, as well as additional safety measures.

The Company will be reporting its environmental and social performance and status of the ESAP implementation on the annual basis and the Bank will monitor the progress.

Full ESDD of the Target Company will be held after acquisition and an ESAP will be developed to structure the Target Company to meet both national and EU standards for environment, health and safety and EBRD’s ESP 2014.  The Client has committed that the Target Company will be operated and managed in full compliance with the Bank’s performance requirements.

Technical Cooperation

None.

Company Contact

Ales Mozetic
Don Don doo
Bulevar Zorana Djindjica 144b
11070 Belgrade

+381 11 267 0935

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

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

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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.