EBRD and IFC to bump up stakes in Drobe

  • 2004-08-26
  • From wire reports
VILNIUS - The European Bank for Reconstruction and Development and the International Finance Corporation are likely to increase their equity stakes in Drobe, Lithuania's manufacturer of pure-wool and wool-blend fabrics.

Drobe, based in Kaunas, said when it was negotiating the capitalization of part of its debt to the international financial institutions, while restructuring another part.
The company expects to complete talks by the end of this year.
"It has not been decided yet by how much their equity stakes will increase. This process will continue until the end of the year," Saulius Korsukovas, CEO of Drobe, told the Baltic News Service.
The EBRD and IFC have loaned 21 million litas (6.1 million euros) to Drobe, but loan repayment agreements have not been met.
Loans provided to Drobe by Vilniaus Bankas and Nord/LB Lietuva, however, have been repaid on time.
Drobe has an authorized share capital of 46.8 million litas. The EBRD currently owns 19.9 percent of the stock, while the IFC holds 7.12 percent.
The Kaunas-based manufacturer has reported sales of 37.1 million litas for the first half of this year, down by 0.5 percent year-on-year.
The company managed to trim its first-half loss to 2.5 million litas, from a loss of 4.8 million litas a year ago after investing in new technologies and cutting its workforce from 1,300 people to about 980.
Korsukovas said that Drobe expects to break even this year and turn a profit of about 1 million litas in 2005 after posting an annual loss of 16.3 million litas in 2003.
The company sells around 75 percent of its production to Western Europe and only 3 percent on the domestic market.
The Finnish investment fund Finnventure Rahasto V Ky is Drobe's largest single shareholder with 39.14 percent of the stock.