EBRD exits investment in Agri Europe, February 2017
Bank ends successful involvement with leading agricultural producer and trader
The European Bank for Reconstruction and Development (EBRD) has exited its equity investment in Agri Europe, a leading agribusiness group registered in Cyprus and mainly operating in Serbia and Ukraine.
The EBRD became a shareholder in the company in 2013 with an EUR 50 million investment to support the expansion of its farming and meat processing operations through investment in silo infrastructure, agriculture equipment and working capital financing. Prior to its equity investment, the Bank supported the client’s primary agriculture operations in Ukraine with a USD 7 million loan in 2007. The EBRD also arranged the client’s first syndicated loan with international banks worth EUR 80 million after the global financial crisis.
Agri Europe is privately owned and one of the largest vertically integrated agribusiness companies in the Balkans, operating in sugar and meat processing as well as in farming operations. The company consolidates MK Group (a Serbian producer and trader of agricultural commodities), Carnex (a leading Serbian meat producer), Sunoko (a leading Serbian sugar producer and exporter) and AgroInvest (a Ukrainian subsidiary active in primary agricultural production).
Miljan Zdrale, EBRD Regional Head of Agribusiness in central and south-eastern Europe, said: “Our equity partnership, cooperation and involvement has produced rewarding results for all parties. The EBRD’s continuous engagement with the majority shareholder and the company’s management has led to significant improvements in the governance structure, including the functioning of the supervisory and management boards. Over the years the company has grown into the leading and most active player in numerous industries. After our exit we will remain in close contact and review selected investment proposals which meet the EBRD’s strategy and transition objectives for the sector and the region with the aim to successfully cooperate on new projects, hopefully in the near future.”
Miodrag Kostic, President of the Board of Directors of Agri Europe, who has been involved in the cooperation with the EBRD for many years, said: “The EBRD has been supporting the development of the company for 10 years. The cooperation started with loan facilities and progressed to an equity investment that lifted our company to a completely new level. Working together we made good progress in different areas of business and corporate governance, providing a solid basis for future long-term growth. We believe that together we found a proper balance between the relevant expertise of the EBRD and the vision and entrepreneurship of the company. This has been key to the successful cooperation to the present day and we will nurture it in the future as well. In that sense it can be said that the first phase of cooperation has now finished and we are ready more than ever to move forward to the next phase with some larger and possibly more challenging projects.”
Strengthening the resilience of the countries and the companies where it invests is one the EBRD’s strategic goals as the Bank defines resilience as one of the six transition qualities. The EBRD’s new transition concept, introduced this year, argues that a well-functioning market economy should be competitive, inclusive, well-governed, environmentally friendly, resilient and integrated.
In the agribusiness sector alone, the EBRD’s net cumulative commitments since 1991 have exceeded EUR 7 billion in over 450 projects in its region of operations.