EBRD Lends 5.5 Mln Euro To Bulgarian Dairy Co Fama To Back Investments

"The project will enable Fama to expand its market share by building its own distribution network in Varna, Sofia and Plovdiv, the company’s largest regional markets," the lender said in a statement.

The company will also launch the production of value added products, such as long-life milk, while outsourcing low-margin products, the statement said.

The EBRD funds will also help Fama to refinance its short and medium-term loans, strengthening its balance sheet.

Fama's owner, private equity fund GED Eastern Fund II, is co-financing the project with additional 2.5 million euro.

"Fama will be able to optimize operations and increase its production, adapting to new market conditions. [...] The project will support the whole value chain of the business and further development of the quality dairy market in Bulgaria," the President of Fama's Board of Directors, Robert Luke, said in the statement.

The EBRD said that the Bulgarian dairy market remains highly fragmented, adding that Fama is the country's third largest dairy producer.

Fama (www.fama.bg), set up in 1991 with headquarters in the northeastern city of Dobrich, has a daily capacity to process 180 tonnes of milk.

Private equity group GED (www.gedprivateequity.com) bought Fama in 2007 through GED Eastern Fund II, a vehicle focused on investments in southeast Europe.

Since the start of EBRD operations in Bulgaria, the bank has committed close to 2.0 billion euro in more than 120 projects in key sectors of the country's economy, mobilising additional investment worth more than 6.7 billion euro.

($=0.6855 euro)