Atlantic Grupa Equity

complete

The EBRD is considering providing financing of up to EUR 70 million to Atlantic Grupa d.d. (‘AG’), a leading Croatian company engaged in production, development and distribution of fast moving consumer goods, which will be used for further regional expansion through acquisition of Droga Kolinska d.d. (‘DK’), a Slovenian based food and beverage producer, with aim of further integrating and improving operations. The proposed transaction will demonstrate the successful restructuring and integration of two compatible regional companies in South-eastern Europe. Improvements will be realised by exploiting significant cost synergies in the operations of the two businesses, through the rationalisation in production, purchasing and distribution activities. In addition to this, the project will bring improvements in corporate governance and business standards. This will be achieved by implementing a Management Information System across the new group subsidiaries in the region, which will enable regular reporting to internal and external stakeholders, as well as better budgeting and other decisions. Moreover, the project will explore potential improvements in the energy efficiency of production facilities. The Project is expected to serve as an example for other companies in the region which are considering expansion in their neighbouring markets. Atlantic Grupa d.d. is a leading Croatian company engaged in the production, development and distribution of fast-moving consumer goods in Croatia and the Western Balkans region. EUR 70 million, including: i. An equity investment of up to EUR 30 million into ordinary shares of Atlantic Grupa through capital increase, and ii. Subordinated debt facility of up to EUR 40 million to Atlantic Investment d.o.o., a fully owned subsidiary of Atlantic Grupa Environmental and social due diligence to date has focused on AG given that access to DK is limited until the acquisition is complete. Detailed information has been provided by AG on its environmental and social policies and practices. While AG does not have a written environmental policy at the group level, individual facilities (e.g. Cedevita, Neva) do have written policy statements. AG has staff dedicated to environmental and social issues at both the central and individual facility level. All production facilities are certified according to a range of management systems and certificates including ISO 9001, ISO 14001, HACCP. AG has an HR function which operates both at a central and facility level. There are written policies and procedures covering a range or areas including terms and conditions, performance management and career development, education, and compensation and benefits. AG is compliant with national HR management requirements and is regularly inspected by the authorities. AG is aware of the various impacts associated with its production and distribution facilities and has systems and practices in place to deal with these. Given the nature of the company's products and production techniques, impacts on local communities are limited and are dealt with on a facility by facility basis. There are a number of communication channels used by AG for both internal communication with workers and external communications with customers and local communities. No ESAP is required for this operation at this stage. Post-acquisition a third party auditing programme will be undertaken of all DK facilities. Once detailed due diligence on DK facilities has been completed then an ESAP will be developed as required to ensure compliance with AG corporate requirements and EBRD's Performance Requirements. Monitoring of this project will be via annual environmental reports submitted by the Company and by site visits, as and when required by the Bank. None. Neven Vrankovic, Group Vice President, Corporate Affairs Atlantic Grupa Tel: +385 1 2413 900 Email: neven.vrankovic@atlantic.hr Website: www.atlantic.hr