The European Bank for Reconstruction and Development (EBRD) has agreed to acquire a minority stake in one of Russia’s best-known mineral water companies, JSC Narzan, as part of a US$12.25mn combined loan and equity investment.
The EBRD financing package will help Narzan expand its bottling capacity, develop new products and provide it with working capital.
The Narzan spring in Kislovodsk in Russia’s southern Stavropol region was documented for the first time in the early 18th century and its mineral water has been bottled since 1894. A household name during the Soviet era, Narzan is today widely available in retail outlets throughout the country and is a leader in the sparkling mineral water sector.
Narzan is a traditional Russian mineral water, which we believe has good potential to capture a growing share of the booming Russian beverage market, says Hans Christian Jacobsen, director of the EBRD agribusiness team.
The company is also a high-profile business in the North Caucasus, a region which so far has seen only limited foreign and domestic investment, and this project should therefore send an important signal to those thinking of doing business in the area, Jacobsen adds.
Thanks to this loan, Narzan is entering a new phase of its development, says Viacheslav Sinadski, managing director and member of the company’s board. The managers and owners of Narzan believe that the EBRD financing will help form the basis for the company’s long-term expansion and growth.
The EBRD has signed 203 investments worth more than €
3.25bn in the agribusiness sector across its countries of operations.