The FINANCIAL — The European Bank for Reconstruction and Development (EBRD) is supporting the regional expansion of Serbia’s Don Don bakery through the takeover of Slovenia’s Pekarna Grosuplje with a €10.3 million loan as part of a financial package for a total amount of €60 million.
This package includes loans by the regional commercial banks SKB Banka d.d., Ljubljana, Banka Koper d.d., Unicredit Banka Slovenija d.d., Societe Generale Srbija AD, Unicredit Bank Srbija AD as well as the KJK private equity fund from Finland, an existing minority shareholder of Don Don.
The funds will support the takeover and integration of Pekarna Grosuplje into the Don Don Group, which will thus become a leading industrial bakery in the markets of the former Yugoslavia able to cater to major retailers as well as serving as a platform for further expansion in the region, according to EBRD.
Originally funded as a small bakery in Slovenia in 1993, today Don Don is the leading industrial bakery in Serbia, but also active throughout the Western Balkans and Croatia. In April 2014, KJK acquired a 25 per cent stake in the company, with the proceeds invested in further expansion. Don Don currently operates eight production plants and has 1,300 employees.
Pekarna Grosuplje, established in 1951, is one of the best known bakeries in Slovenia. It became part of the retailer Mercator in 2008 and effectively operated as its in-house bakery since. Following the takeover of Mercator by Croatia’s Agrokor in 2014, Pekarna Grosuplje was earmarked as a non-core asset, but will continue to supply the retailer.
Miljan Zdrale, EBRD Agribusiness Head for South-Eastern Europe, said: “This is an important step towards the consolidation of a market suffering from fragmentation and inefficiencies. Bringing together two strong and well-established brands will be a win-win-situation for the companies, suppliers and customers. The loan package will not only finance the expansion of Don Don, but will also lead to a strengthening of corporate governance and operational processes.”
Aleš Mozetič, CEO and owner of Don Don, added: “The cooperation with the EBRD is of great significance for our company. The Bank’s support for our development is a confirmation that we are on the right path. I am sure that this is only the beginning of a long and successful cooperation.”
The EBRD is a leading investor in the Western Balkans and last year alone provided over €1.0 billion for projects in all sectors of the economy. The region has strong agribusiness potential which the EBRD has been fostering since it began operations. To date, cumulative EBRD investments in the agribusiness sector in the Western Balkans amount to almost €750 million.
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