Bank to invest RON 32 million for a 13 per cent stake in Romanian agribusiness enterprise
Bucharest, October 13, 2017 - The EBRD and Agricover Holding SA have signed legal agreements today confirming the Bank‘s intention to become a shareholder in the Romanian agribusiness company.
According to the agreement, the EBRD will invest RON 32 million (€7 million equivalent) in the company’s capital for a subscription to a 13 per cent stake. The completion of the transaction is subject to statutory approvals and is expected to be finalised before the end of 2017.
Agricover Holding SA is a major player in the Romanian agricultural sector, offering agribusiness and financial services to farmers through a highly integrated and original business model centred around satisfying the essential needs of farmers. With 17 years of experience in Romanian agriculture and 850 employees, the company supports more than 4,500 farmers through its two main subsidiaries Agricover SRL and Agricover Credit IFN. In 2016, the firm reported a turnover of RON 1.2 billion and provided RON 1.0 billion in financing.
Jabbar Kanani, President of Agricover Holding SA, said: “We are joining forces with the EBRD to accelerate our support for the development of modern agriculture in Romania. Together with the Bank we will continue to provide farmers with innovative solutions designed to enhance the performance of their farming activities.”
The EBRD’s investment will support the growth of one of the main locally owned Romanian companies serving farmers in all agricultural sectors. The funding will allow the firm to meet the growing financing needs of local farmers and will ensure that a larger number of small and medium-sized farms will gain access to modern technologies and markets. The company will continue to provide support to farmers working in animal husbandry and to develop its recent investment in the pork-processing business.
Miljan Zdrale, EBRD Regional Head for Agribusiness in central and south-eastern Europe, added: “We have been following Agricover’s development with great interest over the past few years. The company has developed a unique structure that has proven to be resilient to the risks inherent in the agribusiness sector. We hope that with our support it can become a role model for other countries where primary agriculture is an important part of the economy.”
Matteo Patrone, EBRD Regional Director for Romania and Bulgaria, said: “Small and medium-sized farms are a driving force of Romania’s agriculture. We are pleased to be partnering with Agricover Holding and we trust that our investment will strengthen farmers’ confidence as well as demonstrate the EBRD’s long-term commitment to Romania’s agribusiness sector.”
The EBRD is one of the largest institutional investors in Romania, having invested €7.6 billion in more than 400 projects in the country. Total investment in agribusiness accounted for €10.3 billion in 624 projects across the EBRD’s countries of operations of which €700 million for 36 projects was invested in Romania.