Trans-Oil to Get a $150 Million Financing Package
Development banks and commercial lenders are providing a boost for Moldova’s leading agricultural firm, Trans-Oil, in the form of a $150 million financing package. The loan is meant to finance the growth of high value-added produce and expansion into new markets.
The European Bank of Reconstruction and Development (EBRD), announced the financing package in a press release on October 1, 2019. The $150 million comes from nine financiers, including three development banks and six commercial lenders.
According to EBRD, the money will allow Trans-Oil to grow its sunflower oil production and explore new markets.
The loan will be used to ensure the company’s trading of crops in 2019. This includes the purchase of grain and sunflower oilseeds from Moldovan farmers and other suppliers, storage, crushing of oilseeds, transportation, and export.
Trans-Oil covers the full agricultural value chain from farming, grain handling, storage and trading to wheat flour production, oilseed crushing and oil bottling.
Trans-Oil Group includes more than 20 companies with a 95 percent share in the market for sunflower seeds and oil production and about 57 percent for the export of cereals and oilseeds from Moldova. On April 1, 2019, the company issued $300 million in secured bonds, to investors from Switzerland, the U.K., and the U.S.
This year, the company is planning to increase its production of organic sunflower oil as well as high oleic sunflower oil, with the latter containing more “good” fat and hence considered to be a healthier, high value-added option.
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Trans-Oil is also working to strengthen its current position in the European Union, the Middle East and northern Africa as well as to expand to new markets.
From the $150 million financing package, EBRD is providing $30 million. The facility, arranged and managed by ING Bank, also involves UniCredit Bank Austria, the Black Sea Trade and Development Bank, the Dutch Development Bank FMO and Mobiasbanca – OTP Group, OTP Bank, FIMBank and Banque Cantonale Vaudoise.
The EBRD and Trans-Oil Group are longstanding partners and the Bank has previously provided loans to the company to finance the purchase of agricultural commodities, the construction of a sunflower seed crushing plant in Ceadir Lunga, the expansion of a grain terminal in the Moldovan port of Giurgiulești on the river Danube and the acquisition and modernisation of a grain storage facility in the neighbouring port of Reni, in Ukraine.
The EBRD is the largest institutional investor in Moldova and to date has invested over €1.2 billion in the country. The Bank also provides business advice to local small and medium-sized enterprises and has helped about 1,000 Moldovan firms improve their performance and growth. Previously, the EBRD contributed a €160 million loan to help Moldova connect its electricity network with Romania’s – a critically important step for the diversification of Moldova’s electricity resources.
