Food and beverages group European Drinks, which is owned by Ioan and Viorel Micula, has turned to the European Bank for Reconstruction and Development (EBRD) for a 195 million-euro loan.
Details of the project were published on the EBRD website yesterday. The project will be submitted to the bank''s board for approval on June 28.
"This debt facility will strengthen the operations of the European Drinks group and support the long-term investment and expansion of the group. The project''s main transition impact will come from the covenanted improvements in corporate governance and transparency at group level. The group will be committed to introducing and maintaining standards of corporate behaviour which will ensure its transition from a family run entrepreneurial company to a well organised large corporate business," EBRD''s website reads.
Ioan Micula, the European Drinks chairman, confirmed that the company had submitted an application to the EBRD, though he provided no further details as to what the loan would be spent on. "We have some investment plans, but cannot make them public for the time being," he said. "We are negotiating all sorts of investments and their costs with a number of financial institutions."
European Drinks is the largest group in the Romanian food and beverages industry and is based in Oradea, Bihor County. The group owns Izvorul Minunilor mineral water, Regal and Fruttia sauces, Natty wafers and Burger beer. It has annual turnover of more than 500 million euros.
Both of the European Drinks owners are also involved in the media industry through their television stations, National and N24, and the daily paper Realitatea Romaneasca. They also own stakes in hotel companies.
The group has become embroiled in controversy due to its failure to repay its debts to the state budget. According to the latest statement by Micula, however, European Drinks no longer has any outstanding debts to the state.
EBRD documents show that an audit and analysis were conducted by staff from the bank''s environmental department, which shows that "the company is in full compliance with Romanian environmental and health and safety requirements, as well as the applicable European Union requirements."
"Our products are made only with ingredients that comply with European Union standards. We''ve been compliant with those standards for several years now," said Micula while attending a retail fair in Amsterdam.
"Our exports went up by more than 100% in the first four months of the year. We have contacted several important European retailers at the fair to whom we can make deliveries," he added.
The company achieved a 15.5% growth in turnover in euros in the first four months of the year, but did not reveal the value of the turnover, however.
The presence of EU-recognised certificates was one of the key factors in the company''s application, the EBRD report shows.
The group''s market strategy has been to launch food products at prices that are lower than those being offered by the competition. Having gained market share using this tactic, European Drinks then made massive investments in improving the quality of its products. Its latest strategic decision saw it enter the beer market at the end of 2003. georgiana.stavarache@zf.ro
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