Washington D.C., February 27, 2002—The
International Finance Corporation and the European Bank for Reconstruction
and Development are leading efforts to restructure Bulgarian paper and
sack maker Celhart, where production has been halted since last year. In
order to facilitate such restructuring, the IFC and EBRD — as major secured
creditors of Celhart — have appointed a Manager of the company in line
with Bulgarian legislation. The two international financial institutions
are in advanced discussions with Celhart's management and its parent company
The main objective of the restructuring is to restart production at the
mill as soon as possible. To that end, IFC and EBRD have initiated
a search for an experienced industry operator for Celhart. Both institutions
are prepared to support financially the restart of operations of the mill.
The appropriate authorities in Sofia and Plovdiv, where Celhart is based,
are being kept informed of the status of the discussions and the steps
being taken and have expressed their support. The EBRD and IFC are
being assisted by local advisors Elana and Lega InterConsult, leading Bulgarian
financial and legal consultants.
Celhart was privatised by Isiklar Holding, a leading Turkish industrial
group with a dominant position in brown paper sack manufacturing in Turkey.
In November 1998 the EBRD and IFC each agreed to provide Celhart a US$13.9
million loan and $1.5 million in the form of new equity capital. The
purpose of the investments was to rehabilitate and modernise Celhart's
production facilities to meet growing demand for kraft sacks and improve
its environmental controls.
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people’s lives. IFC
finances private sector investments in the developing world, mobilizes
capital in the international financial markets, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $31 billion of its own funds and arranged
$20 billion in syndications for 2,636 companies in 140 developing countries.
IFC’s committed portfolio at the end of FY01 was $14.3 billion.
The EBRD aims to foster the transition from centrally planned to market
economies in central and eastern Europe and the Commonwealth of Independent
States. It is owned by 60 countries, the European Investment Bank and the
European Community. Visit the EBRD’s website at www.ebrd.com.