Two Romanian wood-processing companies are borrowing a combined €
135mn from the EBRD to help prepare their acquisition by Kronospan Holdings Limited, Europe’s leading producer of wood-based panels.
The loan will help support the financial restructuring of MDF Sebes, a medium-density fibreboard and resin plant, and Sepal, a particleboard plant. Both are owned by Italy’s Gruppo Frati. Following acquisition, the loan will also help both companies remove production bottlenecks and expand production capacity.
The EBRD will take €
70mn, with a 10-year maturity, on its own books, while the remaining €
65mn, with a 7.5-year maturity, is syndicated to a consortium of Austrian banks in what is considered by industry experts a rare combination: a large syndication for a private deal in Romania, as well as the longest maturity for a private company in the country.
Hildegard Gacek, director of the EBRD’s office in Romania, says the project is important for Romania because the restructuring and ongoing modernisation of such local companies can create internationally competitive wood-based panel producers. Gacek adds that a good strategic investor with expert knowledge in this industry will support further development of the Romanian construction and export-oriented furniture industries.
In 2003 the bank lent €
45mn to a subsidiary of Kronospan Holdings Limited in Russia. Before this the EBRD had assisted Kronospan with projects in Poland.
Established in 1897, Austria’s Kronospan operates in 11 European countries and focuses on three major areas, including wood-based panels, flooring, and chemicals and paper. Kronospan is the global leader in manufacturing medium and high-density fibreboard, ranks first in terms of laminate flooring, and is the third-largest manufacturer of special decor paper used in laminating MDF and particleboard.
The EBRD is the largest investor in Romania with more than €
2.4bon invested in projects ranging from banking to infrastructure to supporting small and medium-sized enterprises. Working with its many partners, the Bank has mobilised more than €
7.5bn in projects across the country.